A B S T R A C T
Handicraft purchases in traditional bazaars involve more than economics—tourists' choices are driven by price, psychology, and cognitive biases. Despite the expansion of studies on purchase intention, the role of cognitive biases in explaining tourists' purchasing behavior in traditional markets has received less attention. This research is applied in terms of purpose and descriptive-survey in terms of method. The statistical population consisted of tourists visiting the traditional markets of Horaman, from which 220 individuals were selected utilizing convenience sampling. Data were collected through a questionnaire and analyzed using structural equation modeling based on partial least squares (PLS-SEM). The results indicated that all cognitive biases had a positive and significant effect on tourists' willingness to pay. Among them, the framing effect had the greatest influence on willingness to pay, with a path coefficient of β = 0.760, followed by anchoring bias (β = 0.600). Furthermore, the perceived authenticity of the market space played a significant mediating role in the relationship between the halo effect (β = 0.308) and social proof (β = 0.278) with willingness to pay. The coefficient of determination (R² = 0.616) for willingness to pay also indicates the adequate explanatory power of the research model. Tourists' willingness to pay is not formed solely on the basis of rational evaluation of product attributes; rather, cognitive biases and their perception of the authenticity of the markets space also play an imperative role. These findings support cultural marketing, better handicraft presentation/supply, heritage storytelling, and traditional market competitiveness.
Extended Abstract
Introduction
Traditional markets, as one of the most significant urban tourism attractions, play a pivotal role not only in economic functions but also in conveying cultural values, preserving destination identity, and enhancing tourists’ experience. They are considered among the most important platforms for interaction among tourists, local communities, and cultural heritage. In this context, handicrafts, as symbols of local culture and identity, hold a special place in the tourist experience, and their purchase constitutes a part of tourists' economic and cultural interaction with the destination. Despite this significance, the gap between sellers' asking prices and tourists' willingness to pay remains one of the fundamental challenges of traditional markets. Preceding research studies have predominantly explained willingness to pay on the basis of rational factors such as product quality, perceived value, demographic characteristics, destination image, and reference price, whereas behavioral economics theories indicate that individuals' economic decisions are not always rational and are subject to the influence of cognitive biases. Although the role of these biases in tourists' decision-making has received attention in recent years, most studies have focused on destination choice, tourism service reservations, or general travel behaviors, while their role in micro-economic decisions has been less examined - particularly in purchasing handicrafts in traditional markets. This gap is of greater significance in traditional markets, because the cultural and multisensory environment of these markets, by increasing cognitive load, directs tourists' decision-making from analytical pathways toward intuitive judgments, thereby creating conditions for the emergence of biases such as anchoring, framing, the halo effect, and social proof.
In such circumstances, the cultural credibility of the destination, the manner of product presentation, the initial price, and the behavior of other tourists can influence the perception of value and the level of willingness to pay. Therefore, understanding the cognitive mechanisms affecting tourists' purchase decisions can contribute to a more precise explanation of their behavior and the design of more effective strategies for managing traditional markets. Despite the available evidence, most domestic and international studies have concentrated on modern retail environments or marketing variables, and the simultaneous examination of the role of cognitive biases, perceived authenticity of the market space, and tourists' willingness to pay in traditional heritage markets has received less attention. Accordingly, drawing on a behavioral economics approach, the study investigates the effect of cognitive biases - including anchoring bias, framing effect, halo effect, and social proof - on tourists' willingness to pay for handicrafts in the traditional markets of Horaman, and also explains the mediating role of perceived authenticity of the bazaar space. It is expected that the findings will contribute to the development of behavioral economics literature in cultural tourism while providing a basis for improving marketing strategies, pricing, and the management of traditional and heritage markets.

Methodology
In terms of paradigm, this research is situated within the positivist framework and is applied in terms of purpose. Methodologically, it is a quantitative, descriptive-survey, correlational study that employed structural equation modeling based on partial least squares (PLS-SEM) to test the causal relationships among variables. The statistical population consisted of domestic and foreign tourists visiting the traditional markets of Horaman during the final quarter of 2025 and the first quarter of 2026 who had experience purchasing handicrafts. Given the unlimited nature of the population, a sample size of 220 was determined, and 240 questionnaires were distributed among tourists using a non-probability purposive convenience sampling method. Data were collected utilizing a structured questionnaire. The first section gathered demographic information; the second section measured cognitive biases and perceived authenticity of the market space using a seven-point Likert scale; and the third section measured willingness to pay through the contingent valuation method by recording the maximum amount respondents were willing to pay.
Real handicrafts (not images) boosted ecological validity and the endowment effect, with item order reducing fatigue and bias. The questionnaire measured anchoring, framing, halo, social proof, perceived authenticity, and willingness to pay - adapted from validated studies. Two authenticity items were removed for low loadings. Content validity was expert-confirmed; pilot results showed good reliability and convergent validity. Analysis used SPSS 28 (descriptive) and SmartPLS 4 (inferential), with path coefficients and mediation tested via PLS and 3,000 bootstrap resamples.

Results and Discussion
The descriptive findings indicated that 65% of respondents were male and 35% were female. The highest age frequency belonged to the 36 - 45 age group (35%), followed by the 26 - 35 age group (25%). In terms of education, 65% held an associate or bachelor's degree, and 20% had postgraduate education. Regarding income distribution, the highest shares were observed in the 10 - 20 million toman (35%) and 20 - 30 million toman (30%) groups. The majority of tourists were Iranian (85%), 60% were visiting the Horaman local markets for the first time, and the primary purpose of travel for 60% of respondents was tourism and recreation. These results indicate an appropriate diversity of the sample for examining tourists' purchasing behavior. The descriptive statistics of the variables revealed that the mean scores of all constructs were above the midpoint of the scale. Among them, perceived authenticity of the market space had the highest mean score (5.80), reflecting tourists' favorable perception of the authentic atmosphere of the traditional Horaman markets. The results of the measurement model evaluation indicated that all constructs possessed satisfactory reliability and validity. Cronbach's alpha and composite reliability values exceeded 0.7, and the average variance extracted for all constructs was above 0.5, confirming adequate convergent validity.
Furthermore, the Fornell–Larcker criterion, HTMT ratios, and cross-loadings indicated satisfactory discriminant validity of the model. To improve model quality, two items related to the perceived authenticity of the market space construct were removed, and the final model demonstrated adequate fit. The structural model demonstrated acceptable fit, with R² values of 0.616 for willingness to pay and 0.496 for perceived authenticity of the market space.
Additionally, the Q² and GoF values were 0.163 and 0.525, respectively, indicating strong predictive power and robust model fit. The hypothesis test results exhibited that all research relationships were significant at the 99% confidence level. The framing effect, with a path coefficient of 0.760, had the strongest direct effect on willingness to pay, followed by anchoring bias with a coefficient of 0.600. Moreover, the halo effect and social proof exerted indirect effects on willingness to pay through perceived authenticity of the market space, with coefficients of 0.308 and 0.278, respectively, confirming the mediating role of this variable. In addition, income and education also had positive and significant effects on willingness to pay, though the magnitude of their influence was lower than that of the cognitive variables.
These findings indicate that tourists' decision-making in traditional markets does not rely solely on economic factors or objective product attributes, but is significantly influenced by cognitive biases and their perception of the authenticity of the market space. The superiority of the framing effect underscores the importance of the manner of presentation and narrative construction about handicrafts in enhancing perceived value and willingness to pay. Furthermore, the effect of anchoring bias indicates that the initial price presented can serve as a reference point for tourists' judgments about the product's value. The mediating role of perceived authenticity also suggests that the historical and cultural atmosphere of the Horaman local market reinforces the effect of destination credibility and the behavior of other tourists, thereby enhancing the valuation of handicrafts. Overall, while aligning with prior studies, the research findings emphasize the importance of a behavioral economics approach in explaining tourists' purchasing behavior and designing marketing strategies for traditional and heritage markets.

Conclusion
The results demonstrated that tourists' purchasing behavior in traditional and heritage markets cannot be explained solely by economic variables and rational decision-making models; rather, cognitive biases play a decisive role in the perception of value and willingness to pay for handicrafts. Accordingly, the theoretical framework of the research - grounded in prospect theory and behavioral economics - successfully explained the role of anchoring bias, framing effect, halo effect, and social proof in shaping tourists' purchasing behavior. The empirical findings also confirmed this framework, indicating that all hypothesized relationships among the variables were statistically significant. The results revealed that the framing effect and anchoring bias had the greatest influence on tourists' willingness to pay. This finding suggests that the manner of presentation and narrative construction of handicraft products, the way in which their cultural and historical values are introduced, as well as the initial price presented to tourists, can alter the perceived value of the goods and encourage them to pay higher amounts. Additionally, the halo effect and social proof also exerted their influence on willingness to pay through the perceived authenticity of the market space. The more tourists perceive the market as authentic, credible, and culturally aligned, the higher their valuation of handicrafts and willingness to pay—highlighting the role of environment, place identity, and cultural experience in product valuation.
Theoretically, this study bridges behavioral economics and cultural tourism, advancing understanding of tourist purchasing behavior. Unlike prior work focused on economics, quality, or image, this research shows cognitive/perceptual factors significantly influence economic choices. Thus, it fills a literature gap, offers a framework for studying cognitive biases in heritage settings, and lays groundwork for future behavioral tourism economics research. From a practical perspective, the findings suggest that traditional market managers, tourism planners, and handicraft vendors should pay attention not only to traditional marketing approaches but also to the psychological dimensions of tourists' decision-making. Preserving the physical and cultural authenticity of traditional markets, strengthening historical and cultural narratives about the products, leveraging the capacity of the Horaman World Heritage brand, designing appropriate presentation and introduction methods for handicrafts, and creating an authentic experience for tourists can enhance the perceived value of products and strengthen their willingness to purchase. Furthermore, training vendors in consumer behavior, behavioral economics, and the principles of effective and ethical communication with customers can play a significant role in enhancing the performance of traditional markets and increasing the income of stakeholders in this sector. Despite its valuable findings, this research was subject to certain limitations. Cross-sectional survey data limit temporal analysis; the Horaman market focus also restricts generalizability due to cultural, social, and economic variations. Further studies in other traditional/heritage sites would enhance external validity.
Based on findings, several practical recommendations can be offered. First, handicraft vendors should enhance the perceived value of their products by emphasizing the cultural, historical, and identity-based narratives associated with them. Second, tourism managers and authorities should prioritize the preservation of the physical and cultural authenticity of traditional markets in their management plans. Third, leveraging the capacity of the Horaman World Heritage brand in marketing and promotional programs can strengthen tourists' mental image and increase their willingness to pay. Fourth, organizing training courses for vendors on behavioral economics, customer communication, and cultural marketing would facilitate the effective and ethical application of the research findings. Fifth, the development of cultural storytelling programs and the introduction of the history of local handicrafts can enhance the economic and cultural value of the products. Additionally, for future research studies, it is recommended that this model be tested in other traditional markets and heritage destinations in Iran and other countries. Examining the role of other cognitive biases - such as loss aversion, confirmation bias, scarcity effect, or endowment effect - could also enrich the literature in this field. The adaptation of mixed quantitative and qualitative methods, longitudinal studies, and experimental designs would enable a deeper understanding of tourists' decision-making processes. Future research could explore how culture, personality, motivation, experience, and tourist type interact with cognitive biases. Overall, understanding tourists' cognitive decision-making can improve policies for traditional market development, handicraft competitiveness, and visitor experience.

Funding
There is no funding support.

Authors’ Contribution
Authors contributed equally to the conceptualization and writing of the article. All of the authors approved thecontent of the manuscript and agreed on all aspects of the work declaration of competing interest none.

Conflict of Interest
Authors declared no conflict of interest.

Acknowledgments
We are grateful to all the scientific consultants of this paper.