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Behavioural Economics and Richard Thaler’s Contributions
What makes behavioural economics important for understanding human behaviour? What work has been ongoing in this field of study? What have Richard Thaler, this year’s “Nobel” prize winner, and his colleagues done to better understand human behaviour?
This year’s Sveriges Riksbank prize in Economic Sciences, popularly referred to as the “Nobel” prize in Economics, was awarded on 9 October to Richard Thaler of the Graduate School of Business, University of Chicago for his contributions to behavioural economics. More specifically, and similar to his long-time collaborator Daniel Kahneman (who was awarded the prize in 2002 along with Vernon Smith) his contribution was to apply insights from psychology to economic decision-making. In many ways Thaler’s research overlapped and complemented Kahneman’s, and over the next few paragraphs I will attempt to present Thaler’s contributions to the areas of behavioural economics and behavioural finance. But before I discuss Thaler’s contributions it would be instructive for us to briefly discuss the origins and main motivations of behavioural economics.
Origins and Motivations
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