Behavioral economics and the related field, behavioral finance, study the effects of psychological, social, cognitive, and emotional factors on the economic decisions of individuals and institutions and the consequences for market prices, returns, and the resource allocation. Behavioral economics is primarily concerned with the bounds of rationality of economic agents. Behavioral models typically integrate insights from psychology, neuroscience and microeconomic theory; in so doing, these behavioral models cover a range of concepts, methods, and fields. Behavioral economics is sometimes discussed as an alternative to neoclassical economics.
The study of behavioral economics includes how market decisions are made and the mechanisms that drive public choice. The use of “Behavioral economics” in U.S. scholarly papers has increased in the past few years as a recent study shows.