US economist Thaler wins Nobel for ‘human angle’ to financial decisions

Source: The Hitavada      Date: 10 Oct 2017 08:56:41


 

STOCKHOLM,

US economist Richard Thaler won the Nobel Economics prize on Monday for showing that economic and financial decision-makers are not always rational, but mostly deeply human.
Bridging the gap between economics and psychology, Thaler’s research focuses on behavioural economics which explores the impact of psychological and social factors on decisions by individuals or groups in the economy and financial markets.
“He’s made economics more human,” the Nobel jury said, calling Thaler “a pioneer” on integrating economics and psychology.


“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 jury’s statement said.


“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.” His work even earned him a glamorous foray into the movie business when he made a cameo appearance, alongside Christian Bale, Steve Carell and Ryan Gosling, in the 2015 movie “The Big Short” about the credit and housing bubble collapse that led to the 2008 global financial crisis.


Thaler told the Nobel committee by video conference he was “pleased” by the award. “Well, I was pleased. I no longer will have to call my colleague Eugene Fama ‘Professor Fama’ on the golf course,” he joked, referring to his University of Chicago colleague who won the prize in 2013. “I think the most important recognition is that economic agents are human, and economic models have to incorporate that,” he said.


Thaler is a professor at the University of Chicago - a school popular with the Nobel economics committee. Of 79 laureates so far, more than a third have been affiliated with the university’s school of economics.