Richard Thaler Wins Economics Nobel for Recognizing People Are Irrational

  • Richard Thaler Wins Economics Nobel for Recognizing People Are Irrational

Richard Thaler Wins Economics Nobel for Recognizing People Are Irrational

Thaler, who is professor of behavioural science and economics at Chicago Booth University, won the prize, which included nine million Swedish Krona (£843,000), for his contribution to behavioural economics.

Much of Thaler's output in fact hinges on how irrational human behavior influences economics. "By exploring the consequences of limited rationality, social preferences, and lack of self-control, he has shown how these human traits systematically affect individual decisions as well as market outcomes", Royal Swedish Academy of Sciences said in a press release.

Speaking by phone to a news conference immediately after he was announced as the prize victor, Professor Thaler said the most important impact of his work was "the recognition that economic agents are humans". "This is quite a amusing question", he said. "The serious answer to the question is that I plan to spend some of it on having fun and give the rest away to the neediest causes I can find".

Thaler is perhaps best known as one of the main proponents of "nudge theory", the idea that small interventions on how things are presented in the environment can push people to make certain decisions that would benefit them or their environment.

Thaler has said his favorite example of a nudge is how adding flies to urinals in airports reduces spillage. Their work has encouraged governments and companies to make a greater effort to incorporate behavioral science, including elements related to unconscious biases, as well as comfortable but misleading rules of thumb and analytical shortcuts. He is also the founder of asset management firm Fuller & Thaler Asset Management.

In 2015, Thaler provided a cameo alongside pop star Selena Gomez in the film "The Big Short", about the global financial crisis.

The Sveriges Riksbank (Swedish National Bank) Prize in Economic Sciences in Memory of Alfred Nobel was first awarded in 1969, almost seven decades after the series of prestigious prizes that Nobel called for. It was established in 1968 and was not part of the original group of Nobel awards that date back to 1895.