This chapter explores the evolution and impact of behavioural economics, which has revolutionised our understanding of decision-making by integrating psychological insights into economic theory. Traditional economic models, based on rational decision-making, are challenged by the behavioural approach, which highlights the role of cognitive biases, emotions, and social factors in shaping choices. The chapter traces the historical development of the field, from Herbert Simon's concept of bounded rationality to the contributions of Kahneman and Tversky's prospect theory, and examines key theories such as mental accounting, nudging, and the dual-process theory of decision-making. Empirical studies demonstrate how these theoretical frameworks manifest in real-world behaviour, influencing areas like consumer choice, public policy, and corporate strategy. The chapter also discusses the practical applications of behavioural economics, including interventions in public health, energy conservation, and retirement savings, alongside its growing role in business and marketing. Despite its successes, the field faces critiques regarding its reliance on laboratory experiments, ethical concerns about nudging, and its focus on individual behaviour. Future research should address these challenges and explore the integration of behavioural economics with other disciplines to address global issues such as climate change and economic inequality. Ultimately, behavioural economics provides a more nuanced and realistic understanding of human decision-making, with broad implications for policy design, business strategy, and societal well-being.