Nobel economics prize : Richard Thaler
When I was 14 years old, I found a interesting book at bookstore. You can expect it is ‘Nudge‘. To me bookstore means ‘Wings‘ to fly high. When I stand in there, It is like hometown. Books are so comfy. This is a personal story and now I tell about ‘Nobel economics’. The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2017 was awarded to Richard H. Thaler “for his contributions to behavioural economics“. Professor Peter Gärdenfors, Member of the Economic Sciences Prize Committee, “He’s made economics more human“. I want to go into 2017 Nobel economics prize more deeply. 🙂
“Richard H. 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.” – The Nobel committee
Who is Richard H. Thaler?
He(72, born 1945) is a professor of Behavioral Science and Economics at the University of Chicago Booth School of Business. He systematized ‘Behavioral economics‘ for 30 years. He said “This award was particularly meaningful because behavioral economics was really out in the wilderness 40 years ago. It’s been a long journey. So I’m happy about that.” Also he is a coauthor, with Cass Sunstein, of Nudge: Improving Decisions About Health, Wealth, and Happiness (Yale University Press, 2008). Surprisingly, Thaler made a cameo appearance in the 2015 movie The Big Short. He joked “Why doesn’t the Nobel committee talk my appearance in movie?” Though he is 72, he is very active and full of vitality to benefit the world.
“If you want to get people to do something, make it easy. Remove the obstacles.”
—Prof. Richard Thaler on ‘Nudge’
Pushing away from assumption
Different from Mainstream economics
Many economic models assume people are “rational, unemotional, and self-controlled.” In his research, Every day we behave in ways that violate economic principles. It is a new field that bridges the gap between economics and psychology. Simply, we can tell 3 things. Keywords are ‘mental accounting, behavioural finance, fairness, dictator game, planner-doer model and nudging‘. (More info)
- Limited rationality
- Social preferences
- Lack of self-control
How can ‘behavioural economics’ survive
He admitted he can’t persuaded all of his colleagues and fellow economists of the importance of behavioral economics. So instead he said “I’ve used the strategy of corrupting the youth, whose minds aren’t already made up.” It is very funny. HAHAHA “Many great, young economists have embraced behavioral economics…The growth of the field is really due to the work of the people that followed me.”
Useful : ‘Make it easy’
At the heart of Nudge is what Thaler calls his “mantra”: “If you want to get people to do something, make it easy. Remove the obstacles,” he explained. “Nudges” push people toward better choices by making those choices easy. “If you want to get people to eat healthier foods, then put healthier foods in the cafeteria, and make them easier to find, and make them taste better.” So in every meeting I say, “Make it easy.” Go to nudge your way! Wherever you go is to be the way.