Behavioral finance is a field that combines psychology and economics to understand how people make financial decisions. It examines the cognitive biases and emotional factors that can lead to irrational behavior in investing, such as overconfidence or fear of loss. This discipline challenges the traditional view that markets are always efficient and that investors act rationally. By studying patterns in human behavior, behavioral finance aims to explain why individuals often make choices that deviate from expected financial outcomes, impacting markets and investment strategies.