This textbook is the first behavioral finance textbook aimed at an undergraduate audience and introduces the main concepts behind this burgeoning field and its potential to explain current real life situations arising in financial markets worldwide. It is therefore of particular relevance when read in the light of the credit crunch, the travails besetting large financial institutions, the lessening of consumer confidence and the sub-prime mortgage crisis. Behavioral finance has risen to prominence since the 1990s and has broken new ground as one of the most exciting new subdisciplines in the social sciences, whilst completely transforming economics and finance. This book charts the development of the discipline and explores fast growing new areas such as neuroeconomics and evolutionary finance. Adopting a step by step approach, key concepts such as time and uncertainty are analyzed, followed by the application of behavioral finance thinking in the arenas of trade and investment. Packed full of real world case studies and other learning features, the book should prove to be an indispensable guide to the field.