Published: Wed, October 11, 2017
Economy | By Guillermo Lane

US Academic Richard Thaler Wins Nobel Economics Prize

US Academic Richard Thaler Wins Nobel Economics Prize

The prize was awarded for “understanding the psychology of economics, ” Swedish Academy of Sciences secretary Goeran Hansson said Monday.

The Nobel economics prize has been awarded to Richard Thaler of the University of Chicago for his contributions to behavioral economics. He also taught at UR from 1974 to 1978.

In a statement, the Royal Swedish Academy of Sciences had said that Richard H. Thaler has incorporated psychologically realistic assumptions into analyses of economic decision-making. He has been pushing the theory that "economic agents are human" and can't always be assumed to be rational decision makers. That's often not the case.

While she says it's hard to overcome some of these tendencies outlined in Thaler's research, Madrian says "the key is to recognize your shortcomings and then try to set yourself up to limit their effects when you're not in a vulnerable situation". Similarly, if payroll deductions for savings are upped a bit every time a pay raise is granted, savings grow faster.

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To address these shortcomings, Thaler and Benartzi pioneered their "Save More Tomorrow" (SMarT) program created to help employees increase their savings rates gradually over time by overcoming self-control problems and other behavioral biases.

"The distinguishing feature of Dick Thaler's work is that it's very relatable and applicable", Kochov said. "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.

The Sveriges Riksbank (Swedish National Bank) Prize in Economic Sciences in Memory of Alfred Nobel was first awarded in 1969, almost seven decades after the series of prestigious prizes that Nobel called for.

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