The Rational Behavior Theory of Small Businesses in the National Capital Region: A Mixed-Methods Study on Participation in Economic Intervention and Prevention Strategies Under the Cares Act

Abstract

The Coronavirus Disease (COVID-19) triggered a national health emergency that caused economic uncertainties for National Capital Region (NCR) small businesses. In response, some NCR small businesses benefited from the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act, which Congress passed to enable a strong and equitable recovery, while others did not. This research aims to understand the extent to which the NCR small businesses implemented economic intervention and prevention strategies under the flow of funds from the CARES Act; specifically, the supplemental disaster funding and grant-funded assistances during the 2020 through 2022 COVID-19 national health emergency. This mixed-methods approach explored the extent to which small businesses exercised rational or irrational behaviors in economic decision-making regarding CARES Act resources, relative to interventions, economic relief and prevention, economic preparedness. The findings revealed that NCR small businesses decisions involved less rational approaches for general reasons, resulting in less rational decision-making in prevention decisions compared to intervention decisions. Recommendations for policymakers include implementing contingency policies for future national emergencies and for small businesses to incorporate strategic planning in all business phases.