What is Behavioral Economics focused on?

Behavioral economics is fundamentally concerned with understanding the psychological factors that influence individuals' economic decisions. It combines insights from psychology and economics to explore how emotions, biases, and social influences affect the choices people make regarding spending, saving, investing, and other economic behaviors. This field challenges the traditional notion of rational decision-making by acknowledging that humans often act irrationally due to cognitive biases, leading to decisions that may not align with standard economic theories.

The other options focus on specific aspects of economics or finance that do not encompass the broader psychological perspective that behavioral economics offers. For example, studying consumer goods pricing is more about market dynamics and supply and demand rather than the underlying behaviors influencing purchasing decisions. Profitability of behavioral finance strategies relates to the application of behavioral insights in finance rather than the core study of decision-making itself. Lastly, assessing the economic impact of government policies focuses on macroeconomic outcomes and implications, rather than the individual decision-making processes explored in behavioral economics.