Nobel Prize in Economics 2017 awarded to Richard H Thaler for studying behavioural sciences

This year’s Nobel Prize in Economic Sciences has been awarded to American economist Richard H Thaler for his contributions on the subject. Thaler is a professor of behavioural sciences and economics at the University of Chicago. [caption id=“attachment_4124975” align=“alignleft” width=“380”] File image of richard Thaler. AP[/caption] The prize was awarded for “understanding the psychology of economics”, Swedish Academy of Sciences secretary Goeran Hansson said on Monday. “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 Nobel jury said in a statement The Nobel committee said Thaler’s work shows how human traits affect individual decisions as well as market outcomes. Thaler “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 added. Thaler’s research demonstrated how nudging — a term he coined — may help people exercise better self-control, eg, when saving for a pension. Thaler “has incorporated psychologically realistic assumptions into analyses of economic decision-making”, the Royal Swedish Academy of Sciences said in a statement on Monday, according to  Bloomberg News.

  On his part, the 72-year-old, whose research specialises in spending habits,  joked that he would try to spend the nine-million-kronor (944,000 euros, $1.1 million) prize sum as “irrationally as possible.” Thaler told the Nobel committee by videoconference 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 2013 Nobel Economics Prize. He 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. Thaler made a cameo appearance in the 2015 movie “The Big Short” about the credit and housing bubble collapse that led to the 2008 global financial crisis. From India, former Reserve Bank of India (RBI) Governor Raghuram Rajan’s name also figures in this year’s list of possible winners brought out by Clarivate Analytics. Giving the list of six possible candidates for the economics Nobel, Clarivate said these were citation laureates — standouts whose research is clearly “of Nobel Class” according to its significance and utility, as attested by markedly high citation tallies recorded in the Web of Science. The list included Colin Camerer of the California Institute of Technology and George Loewenstein of Carnegie Mellon University (for pioneering research in behavioural economics and in neuroeconomics); Robert Hall of Stanford University (for his analysis of worker productivity and studies of recessions and unemployment); and Michael Jensen of Harvard, Stewart Myers of MIT and Raghuram Rajan of the University of Chicago (for their contributions illuminating the dimensions of decisions in corporate finance). Thaler’s name did not figure on the list. The prize for economics, which is the last of the Nobel prizes to be awarded this year is something of an outlier as Alfred Nobel’s will didn’t call for its establishment and it honors 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. Even well-known recipient Friedrich Hayek expressed misgivings about it, saying the prize may unwisely “strengthen the influence of a few individual economists”. With inputs from agencies