This book offers a definitive and wide-ranging overview of developmentsin behavioral finance over the past ten years. In 1993, the firstvolume provided the standard reference to this new approach infinance--an approach that, as editor Richard Thaler put it, "entertainsthe possibility that some of the agents in the economy behave less thanfully rationally some of the time." Much has changed since then. Notleast, the bursting of the Internet bubble and the subsequent marketdecline further demonstrated that financial markets often fail tobehave as they would if trading were truly dominated by the fullyrational investors who populate financial theories. Behavioral financehas made an indelible mark on areas from asset pricing to individualinvestor behavior to corporate finance, and continues to see excitingempirical and theoretical advances.