Behavioral economics is a field that combines elements of economics and psychology to understand how and why people behave the way they do in the real world. It studies the effects of psychological, cognitive, emotional, cultural, and social factors on the decisions of individuals or institutions, and how these decisions deviate from those implied by classical economic theory. Behavioral economics is primarily concerned with the bounds of rationality of economic agents, and it typically integrates insights from psychology, neuroscience, and microeconomic theory.

Some key features of behavioral economics include:

• Bounded Rationality: Behavioral economics assumes that people are boundedly rational actors with a limited ability to process information.

• Biases and Heuristics: Behavioral economics studies the biases, tendencies, and heuristics that affect the decisions that people make.

• Normative Economics: Behavioral economics is often related to normative economics, which draws on psychology and economics to explore why people sometimes make irrational decisions, and why and how their behavior does not follow the predictions of economic models.

Behavioral economics is still a growing field, being used increasingly in research and in teaching. It has many applications in various industries, such as marketing, advertising, and finance. By better understanding the decision-making of target audiences, companies can more effectively advertise to them. The financial sector greatly depends on behavioral finance experts to create innovations that produce better tools that facilitate the massive sector.

In summary, behavioral economics is a field that combines economics and psychology to understand how and why people make decisions in the real world. It studies the biases, tendencies, and heuristics that affect decision-making and is used in various industries to better understand consumer behavior.