Economic psychology is the study of how psychological factors influence economic behavior. It examines how people's thoughts, feelings, and perceptions affect their decisions related to spending, saving, and investing. This field combines insights from both economics and psychology to understand consumer behavior and market dynamics. Researchers in economic psychology explore concepts such as cognitive biases, risk perception, and decision-making processes. By understanding these psychological elements, they aim to improve economic models and policies, helping businesses and governments better predict and respond to consumer actions and market trends.