Abstract
In conventional production models, producers' decision-making is based on the assumption of full rationality and profit maximization. However, evidence from behavioral economics indicates that actual producer behavior is influenced by a variety of factors, such as behavioral preferences, non-financial objectives, cognitive constraints, emotions, moral rewards, learning from experience, and the impact of social norms. This study, employing an analytical-descriptive approach and drawing on the foundations of Islamic economics, proposes a novel model for analyzing producer decisions in which the producer's objective function is a combination of profit and social benevolence.
The results show that in this model, the producer accepts moral costs and, relying on spiritual motivations, forgoes a portion of maximum profit to increase production. This leads to a reduction in price and an enhancement of social welfare. In this framework, the new equilibrium point is positioned at a higher production level and lower price compared to the conventional equilibrium. Consequently, integrating components of behavioral economics with Islamic ethical and value-based principles can steer the production model toward economic efficiency and social justice, offering a more realistic and human-centered depiction of producer behavior.