Final answer:
The scenario where Roger decides to purchase a house with bad credit securing a higher rate mortgage is a typical subject for behavioral economists, who explore why people make decisions that seem irrational, framed by various psychological influences.
Step-by-step explanation:
Understanding Behavioral Economics Through Irrational Decision Making
The most likely scenario for a behavioral economist to study regarding irrational decision-making is scenario c, where Roger decides to own a house even though he has bad credit and secures a mortgage with a higher interest rate. This scenario reflects how individuals make decisions that may appear irrational when judged from a purely economic standpoint and overlook the risk associated with high-interest commitments. Behavioral economics focuses on how psychological factors, framing of the situation, and cognitive biases influence individuals' financial choices. It contends that people do not always act rationally due to various subjective influences, such as the state of mind or emotions, which can lead to decisions that contradict traditional consumer theory.
One illustrative example of irrational decision-making in behavioral economics is the different reactions people might have to saving money based on the total cost of items—like saving $10 on a $20 alarm clock versus saving $10 on a $300 phone—which underscores how people 'frame' financial decisions differently. These insights from psychology help behavioral economists understand and predict economic behavior that deviates from rational models.