A US economist Richard Thaler has won the Nobel Prize for economics this year. The Nobel Prize Committee had announced this yesterday in Stockholm, Sweden. Prof Thaler has won the prize for his new research in behavioral economics. He says that most of the economic decisions of people are irrational. He is also of the view that gut instincts often drive our economic behavior in daily life. This Nobel Prize winner is a professor in Chicago Booth Business School.
Earlier, he wrote a book on ‘Nudge’ in 2008 which proved a great success. The book proved a lot helpful for the governments in altering the behavior of masses. In 2010, Prime Minister David Cameron made a ‘Nudge Unit’ in the country. This changed the economic behavior of the people and increased the country’s tax returns.
Prof Thaler had also appeared in the film “The Big Short”. In this film, he had explained the thinking and behavior of the people while making economic decisions.
The Nobel Prize winner would receive $1.1 million. He also intends to spend the prize money in an irrational way. Here, it is important to mention that Prof Thaler’s theory has helped people to avoid bad behaviors while making economic decisions. It has also helped people to understand market trends.
The Nobel Prize for Economics had started in 1968 after the death of Alfred Nobel. The Americans have dominated in winning the Nobel Prize for Economics. They have won about half of the prizes. From the years 2000-2013, they have won almost all the Nobel Prizes.
Prof Thaler’s research proves that human beings are not the rational creature in making economic decisions. They often pick the wrong choice due to lack of thinking and poor decision making. Nudge theory also explains that people prefer to choose quickly instead of choosing wisely.