Chapter 1: Introduction.

Chapter 1 of the book "Foundations and Trends in Finance," Vol. 4, No. 1-2, by Hersh Shefrin is presented. It offers information on behavioral finance as a process that involves the transition of financial paradigm to a psychologically based framework. It proposes that finance is transforming to a new framework that integrates the features of neoclassical finance and behavioral finance. A brief history of the subject and the organization of the monograph are discussed.