This unit introduces students to the concepts and techniques of rational thinking and decision-making, with emphasis on the sharp discrepancy between ideal rationality and observed human behaviour. In spite of limitations on time, information, memory and reasoning capacity, people are able to make rational choices and plans using simple rules that are effective most of the time. Yet these rules (or 'heuristics') induce cognitive biases. Predictions of various theories of rational choice are compared with scientific findings about how people do choose. The unit provides an essential grounding in the reasoning and decision techniques used in the cognitive and social sciences.