Psychologists and economists often ask similar questions about human behaviour. This volume brings together contributions from leaders in both disciplines. The editorial introduction discusses methodological differences between the two which have until now limited the development of mutually beneficial lines of research. Psychologists have objected to what they see as an excessive formalism in economic modelling and an unrealistic degree of sophistication in the behaviour of individuals, while economists criticize the absence of a general psychological framework into which most results can be fitted and the lack of welfare implications in their theories. The editors encourage scholars to exploit the strengths of each discipline - the ability of psychologists to understand the feelings and motivation of individuals; and the experience of economists to develop normative frameworks. The editors then highlight the links between the contributions by grouping them according to central themes in the study of rationality and well-being: he causes and consequences of 'irrational behaviour'; he role of anticipatory feelings and imperfect self-knowledge on decision-making; the way in which memory of past events and cost of thinking affect current decisions; the interaction between anticipated and remembered utility and its effects on the welfare of individuals; and experimental practice on how to perform controlled experiments to test hypotheses. This exciting volume provides an excellent point of entry for anyone interested in the interface between economics and psychology.