He is known well beyond the halls of academia. He is the co-author of the popular book Nudge, the author of Misbehaving and active on Twitter. He appeared as himself in the 2015 film “The Big Short,” explaining synthetic CDOs at a blackjack table with singer Selena Gomez.
What is behavioral economics?
Mr. Thaler is a pioneer in the field of behavioral economics, which studies the intersection of psychology and economics—fueled by the insight that human beings do not behave in a perfectly rational manner.
Among other things, he has studied the “endowment effect,” the idea that people more highly value an item if they own it; how concerns about fairness can restrain firms’ otherwise-rational price- and wage-setting behavior; and how public policy can influence people to behave in better, healthier ways by way of “nudges” instead of bans, mandates or other forms of legal coercion.
In the words of the Royal Academy, he “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.”
Source: The Wall Street Journal