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The Nobel economics prize has been awarded to Richard Thaler of the University of Chicago for his contributions to behavioural economics.
The 9-million-kronor (USD 1.1-million) prize was awarded to the academic for his “understanding the psychology of economics,” Swedish Academy of Sciences secretary Goeran Hansson said today.
The Nobel committee said Thaler’s work shows how human traits affect individual decisions as well as market outcomes.
Thaler, 72, “is a pioneer in behavioural economics, a research field in which insights from psychological research are applied to economic decision making,” a background paper from the academy said.
That “incorporates more realistic analysis of how people think and behave when making economic decisions,” it said.
“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,” the Nobel jury said in a statement.
Thaler's contributions have built a bridge between the economic and psychological analyses of individual decision-making. His empirical findings and theoretical insights have been instrumental in creating the new and rapidly expanding field of behavioural economics, which has had a profound impact on many areas of economic research and policy, the release said.
Thaler is a Professor of Behavioral Science and Economics at University of Chicago Booth School of Business. He is the co-author (with Cass R. Sunstein) of the global best seller Nudge (2008) in which the concepts of behavioral economics are used to tackle many of society’s major problems.
The economics prize is something of an outlier, Alfred Nobel’s will didn’t call for its establishment and it honours a science that many doubt is a science at all.
The Sveriges Riksbank (Swedish National Bank) Prize in Economic Sciences in Memory of Alfred Nobel was first awarded in 1969, nearly seven decades after the series of prestigious prizes that Nobel called for.
Despite its provenance and carefully laborious name, it is broadly considered an equal to the other Nobel and the winner attends the famed presentation banquet.
Last year, Oliver Hart and Bengt Holmström shared the prize for their contributions to contract theory.
Indian economist Amartya Sen won the Nobel in 1998 for his contributions to welfare economics.
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