Richard Thaler Awarded Nobel for Research on Behavioral Economics
Richard Thaler of the University of Chicago's Booth School of Business, an NBER research associate for more than 25 years, was awarded the 2017 Nobel Prize in Economic Sciences for his research in behavioral economics. The award was announced in October, and Thaler delivered his prize lecture, "From Cashews to Nudges: The Evolution of Behavioral Economics," on December 8 in Stockholm. [Lecture slides]
The Royal Swedish Academy of Sciences' announcement of the prize explains that Thaler "has incorporated psychologically realistic assumptions into analyses of economic decision-making. 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.
"His empirical findings and theoretical insights have been instrumental in creating the new and rapidly expanding field of behavioral economics, which has had a profound impact on many areas of economic research and policy."
The Academy cited many settings in which behavioral insights have enriched the research dialogue, including the study of household saving, the formation of prices in financial markets, the role of fairness in setting wages and prices, and the potential for "nudges" to influence consumer behavior. The Academy's description of the ways in which Thaler's work has been applied may be found here.
A longer summary of the scientific contributions that underlie this award may be found here.
Thaler is the Charles R. Walgreen Distinguished Service Professor of Economics and Behavioral Science at the Booth School and a research associate in the NBER's Asset Pricing Program. In 1992, he and Robert Shiller launched the NBER Working Group on Behavioral Economics, which has served as an important forum for researchers in this field. He served as co-director of the group until 2016.
Thaler became the 27th current or past NBER research affiliate to receive the Nobel Prize:
Oliver Hart and Bengt Holmström, 2016; Angus Deaton, 2015; Lars Hansen and Robert Shiller, 2013; Alvin Roth, 2012; Thomas Sargent and Christopher Sims, 2011; Peter Diamond, 2010; Paul Krugman, 2008; Edward C. Prescott and Finn Kydland, 2004; Robert F. Engle, 2003; Joseph E. Stiglitz, 2001; James J. Heckman and Daniel L. McFadden, 2000; Robert C. Merton and Myron S. Scholes, 1997; Robert E. Lucas, Jr., 1995; and the late: Dale Mortensen, 2010; Robert W. Fogel, 1993; Gary S. Becker, 1992; George J. Stigler, 1982; Theodore W. Schultz, 1979; Milton Friedman, 1976; and Simon Kuznets, 1971.
In addition, six current or past members of the NBER Board of Directors have received the Nobel Prize: George Akerlof, 2001; Robert Solow, 1987; and the late: William Vickrey, 1996; Douglass North, 1993; James Tobin, 1981; and Paul Samuelson, 1970.