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Prof. Richard Thaler of University of Chicago wins Nobel Prize for Economics

By Chennabasaveshwar
|

The 2017 Nobel Prize in Economic Sciences has been awarded to Richard H Thaler for his contribution in behavioural economics. He teaches at the University of Chicago.

Richard Thaler's contributions have built a bridge between the economic and psychological analyses of individual decision-making. He explores how limited rationality, social preferences and lack of self-control affect individual decisions & market outcomes, said the Nobel committee.

Thaler's research is often cited in marketing literature and his insights help us recognise marketing tricks and avoid bad economic decisions.

The Nobel prize consists of a gold medal, a diploma and a cheque for nine million kronor ($1.1 million, 943,000 euros).

Former RBI Governor Raghuram Rajan was also in the running for Nobel prize. The Economics Nobel is also known as The Sveriges Riksbank Prize in Economic Sciences.

Rajan was among six economists on the list of probable winners compiled by Clarivate Analytics, a company that does academic and scientific research and maintains a list of dozens of possible Nobel Prize winners based on research citations.

Why was he awarded 2017 Nobel for Economics?

Richard Thaler's contributions have built a bridge between the economic and psychological analyses of individual decision-making.

Prof.Richard Thaler

Prof.Richard Thaler

Richard H. Thaler studies behavioural economics and finance as well as the psychology of decision-making which lies in the gap between economics and psychology. He investigates the implications of relaxing the standard economic assumption that everyone in the economy is rational and selfish, instead of entertaining the possibility that some of the agents in the economy are sometimes human. Thaler is the director of the Center for Decision Research and is the co-director (with Robert Shiller) of the Behavioral Economics Project at the National Bureau of Economic Research.

Limited rationality

Limited rationality

Richard H. Thaler developed the theory of mental accounting, explaining how people simplify financial decisions. Courtesy: @Nobelprize

Social preferences

Social preferences

Unexpected rain increases demand for umbrellas, but a company exploiting the situation will be unpopular and boycotted. Courtesy: @Nobelprize

Lack of self-control

Lack of self-control

Odysseus and the Sirens is about a tension between the long-term, planning self and the short-term, pleasure-focused self. Courtesy: @Nobelprize

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