STOCKHOLM, SWEDEN (OCTOBER 9, 2017) (REUTERS) – U.S. academic Richard Thaler, who helped popularise the idea of “nudging” people towards doing what was best for them, won the 2017 Nobel Economics Prize on Monday (October 9) for his work on how human nature affects supposedly rational markets.
Influential in the field of behavioural economics, his research showed how traits such as lack of self-control and fear of losing what you already have prompt decisions that may not have the best outcome in the longer term.
“I think the most important impact (of my research) is the recognition that economic agents are human and economic models have to incorporate that,” Thaler, a professor at The University of Chicago Booth School of Business, said in call broadcast at the Nobel news conference.
Awarding the 9 million Swedish crown ($1.1 million) prize, the Royal Swedish Academy of Sciences said: “Richard Thaler’s contributions have built a bridge between the economic and psychological analyses of individual decision-making.”
“Thaler has given us new insights into how human psychology shapes decision making. He has devised new experimental tools to investigate human behaviour. His research has spawned a new field – behavioural economics. And he’s shown how policies based on insights from this field can help people make better decisions. He’s made economics more human,” Nobel economics committee member Peter Gardenfors said.
Thaler brought to prominence the idea of “nudge” economics, where individuals are subtly guided toward beneficial behaviours without heavy-handed compulsion, the theme of a 2008 book he co-wrote which caught the eye of policymakers around the world.
In researching how self-control – or the lack of it – Thaler touched on an age-old problem: why New Year’s resolutions to change aspects of your life are notoriously hard to keep.