A collection of carefully selected contributions to behavioural economics from some of the leading international scholars in the field. Designed to fully complement Volume One, topics covered include preferences, behavioral game theory, motivated mental states, and emotions and decision-making. The book will provide a point of entry to anyone wishing to discover what the intellectual terrain between economics and psychology looks like. Contents: 0 Isabelle Brocas and Juan D. Carrillo: Introduction PART I. BELIEFS: ORIGINS, FORMATION, AND EVOLUTION 1 Jon Elster: Costs and constraints in the economy of the mind 2 Cade Massey and George Wu: Understanding under- and over-reaction 3 Barbara Mellers and A. Peter McGraw: Self-serving beliefs and the pleasure of outcomes PART II. DYNAMIC CHOICES: CONSISTENCY, COMMITMENT AND INTERTEMPORAL SEPARABILITY 4 Isabelle Brocas, Juan D. Carrillo and Mathias Dewatripont: Commitment devices under self-control problems: an overview 5 Ignacio Palacios-Huerta: Consistent intertemporal decision making through memory and anticipation 6 Robin Cubitt, Chris Starmer and Robert Sugden: Dynamic decisions under uncertainty: some recent evidence from economics and psychology PART III. LIMITED COGNITION: ATTENTION, PREFERENCE FORMATION AND RISK EVALUATION 7 Colin F. Camerer and Eric Johnson: Thinking about attention in games: backward and forward induction 8 Dan Ariely, George Loewenstein and Drazen Prelec: Arbitrarily coherent preferences 9 Elke U. Weber: Perception matters: psychophysics for economists PART IV. AFFECTIVE BEHAVIOR: THE ROLE OF EMOTIONS IN DECISION-MAKING 10 Thane S. Pittman and Orit E. Tykocinski: The dark-side of opportunity: regret, disappointment and the cost of prospects 11 Ralph Erber, Maureen Wang Erber and Jennifer Poe: Mood regulation and decision-making: is irrational exuberance really a problem? 12 Jonathan J. Koehler: Which chance was lost? The psychology of damage awards under the loss of chance doctrine