Friday, 13 October 2017

Nobel Prize for Richard Thaler

The 2017 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (aka Nobel Prize in Economics) has been awarded to Richard Thaler of the University of Chicago, "for his contributions to behavioural economics". Some excellent summaries of Thaler's work can be found in this New York Time article, or this Economist article. Marginal Revolution has much more detail (here and here).

I think this award was very well-deserved. I've been using Thaler's work in the first topic of my ECON110 class for many years, especially his characterisation of decision-makers as quasi-rational, rather than purely rational. We even refer to some of his really early research, on mental accounting among buyers of pizza, in the first tutorial.

His book, "Misbehaving: The Making of Behavioral Economics" is on my list of books to read before the end of this summer, so you can expect a book review on that in due course.

Finally, I really liked this bit from the New York Times article:
“In order to do good economics, you have to keep in mind that people are human,” Professor Thaler said at a news conference after the announcement.
Asked how he would spend the prize money of about $1.1 million, Professor Thaler replied, “This is quite a funny question.” He added, “I will try to spend it as irrationally as possible.”

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