This chapter discusses several topics at the frontier of economic science. Historically, economic theory has rested on the assumption that people are rational in their actions. This means that they gather all of the pertinent information about costs and benefits, weigh that information carefully, and proceed if and only if the benefits are at least as large as the costs. There are many situations in which humans systematically fail to act rationally, and in those instances, we sometimes achieve undesirable outcomes. Human beings do not always act as the calculating, self-interested rational actors that economic theory assumes they do. Lots of people cling to their long-term investments (both financial and romantic), investments that stand little hope of panning out, simply because they fall victim to the sunk cost fallacy. Clinging to sunk costs is just one example of irrational behavior.