Building Competitive Creative Villages in Malang City, Indonesia: A Behavioral Economic Approach

Abstract

Aims: This study aims to identify a modelling framework for productive creative villages in Malang City, analyse the economic behavioural factors influencing community participation decisions, and formulate strategic recommendations based on Behavioural Economics to enhance local competitiveness. Study Design: A qualitative descriptive approach using a case study design. Place and Duration of Study: Creative villages in Malang City, East Java, between 2024 and 2025. Methodology: Using purposive sampling, data were gathered through semi-structured interviews, participant observation, and document analysis, validated via triangulation. Results: Findings Findings reveal that participation is significantly shaped by cognitive biases (status quo) and social norms. The resulting seven-dimensional model integrates potential identification, behavioural mapping, empowerment, and circular economy. Conclusion: Integrating behaviour-based interventions, particularly through the provision of social proof and incentives aligned with local norms, is a primary key to overcoming community participation barriers in creative economy development. Policy Implications: Policymakers should implement ‘social proof’ and local-norm-aligned incentives to overcome psychological barriers in community-led economic development.