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This completely rewritten second edition reflects on the revolutionary changes that have occurred in the field since the first edition appeared in 1999, such as the huge expansion in research output, as well as updates of methods and explanations, and the appearance of numerous books on the subject aimed at the popular market. This book reviews an area of psychological research that is not only increasing in popularity in college curricula, but is also making an ever larger impact on the world outside the classroom. The main areas covered are deductive and inductive reasoning, probability judgement, decision making and rationality. In each case, the material is almost entirely new, with topics such as the new paradigm in reasoning research, causal reasoning and counterfactual thinking appearing for the first time. There have also been changes to the structure of the book, with expanded treatments of decision making now spread across two chapters, and a new chapter on personal thinking styles and differences. The book provides a detailed, integrated and approachable treatment of this area of cognitive psychology, and is ideal reading for intermediate and advanced undergraduate students.