For a long time, the standard economic paradigm was dominated by models whose core assumption was that of rationality. However, various findings from cognitive and social psychology suggest that people are often prone to systematic errors, and have unexpected beliefs and preferences. How are the real people different from homo economicus? What heuristics do we rely upon in our reasoning and how may these heuristics lead us astray? How can irrationality be exploited in the markets and in politics? Should the government intervene to protect people from their own irrational choices? In the Economics and Psychology seminar, we will try to find answers to these questions as well as to many others. The seminar concentrates on how the psychological findings may enhance our reasoning about economic affairs and on their implications for applied policy. The core parts of our effort in the seminar will be home-assigned readings and classroom discussion.