The Nobel Prize in Economics was awarded on Monday to economist Richard Thaler, whose research has centered on how markets are shaped by human nature and behaviors.
In awarding the prize, the Royal Swedish Academy of Sciences said Thaler, a University of Chicago Booth School of Business professor, has worked across the economic and psychological spheres and has “given us new insight into how human psychology shapes decision-making,” The Wall Street Journal reported.
Thaler’s work includes a co-authorship with Professor Cass Sunstein of the book “Nudge: Improving Decisions About Health, Wealth And Happiness,” published in 2008, which focused on individual and organizational decision-making.
As reported in the WSJ, when asked about the key findings of his research, Thaler said, “the most important lesson is that economic agents are humans and that economic models have to incorporate that.”
In its own coverage, Reuters said Monday that Thaler had posited the idea that some beneficial behaviors can be guided (or nudged) beyond the ingrained traits of fear of losing what one has (among other concerns). The newswire stated that the concept of “nudging” behaviors, such as saving for retirement, has caught on with public policy efforts in the United States, the United Kingdom and Australia.
As for the roughly $1.1 million in prize money that comes attached to the Nobel, Thaler quipped that “I’ll try to spend it as irrationally as possible.”