The most innovative feature of the book is its extensive coverage of recent research in behavioral and experimental economics. This research not only documents behavior inconsistent with some elements of traditional theory, but also advances positive theories with superior predictive power. The research covered includes studies of loss aversion, reference-dependent preferences, the context and framing of choice, hyperbolic discounting and inconsistent intertemporal choice, predictable errors in updating probabilities, nonlinear weighting of probabilities, and prospect theory. The importance of this material was highlighted by the Swedish Academy of Sciences when it awarded the 2002 Prize in Economic Sciences to Daniel Kahneman (a psychologist who helped lay the foundations of behavioral economics) and Vernon Smith (an experimental economist). Although the topics are "advanced" in the sense that they are near the frontier of economic research and seldom-covered in textbooks, they are readily comprehended because they center on simple controlled experiments and relate to everyday concerns.