Norway, Oct 9: American economist Richard H Thaler won the Nobel Prize 2017 in Economic Science ‘for his contributions to behavioural economics’. Richard H Thaler, born 1945 in East Orange, USA, developed the theory of mental accounting, explaining how people simplify financial decision-making by creating separate accounts in their minds, focusing on the narrow impact of each individual decision rather than its overall effect.
Richard H Thaler’s theoretical and experimental research on fairness has been influential. He showed how consumers’ fairness concerns may stop firms from raising prices in periods of high demand, but not in times of rising costs. Thaler and his colleagues devised the dictator game, an experimental tool that has been used in numerous studies to measure attitudes to fairness in different groups of people around the world.
Thaler has also shed new light on the old observation that New Year’s resolutions can be hard to keep. He showed how to analyse self-control problems using a planner-doer model, which is similar to the frameworks psychologists and neuroscientists now use to describe the internal tension between long-term planning and short-term doing.
Thaler attended Case Western Reserve University where he received a bachelor’s degree in 1967. Soon after, he attended the University of Rochester where he received a master’s degree in 1970 and a PhD in 1974. He joined the Chicago Booth faculty in 1995.
Thaler is a member of the American Academy of Arts and Sciences, a Fellow of the American Finance Association and the Econometrics Society, and in 2015 served as the President of the American Economic Association. He also co-authored of the global bestseller Nudge (2008).