Hello banker! Economist who studied Deal Or No Deal TV show awarded Nobel prize
Richard Thaler of the University of Chicago was handed the accolade for his contributions to so-called behavioural economics.
The Nobel economics prize has been awarded to a researcher who has showed how people’s choices on economic matters, whether on savings or game shows like Deal Or No Deal, are not always rational.
The nine-million-kronor (£842,000) prize was awarded to Richard Thaler of the University of Chicago for “understanding the psychology of economics”, Swedish Academy of Sciences secretary Goran Hansson said on Monday.
The Nobel committee said, as a pioneer in behavioural economics, Mr Thaler has built a bridge between economics and psychology to show a “more realistic analysis of how people think and behave when making economic decisions”.
It said his research has expanded economic analysis by considering three psychological traits: limited rationality, perceptions about fairness and lack of self-control.
Speaking by phone to a news conference immediately after he was announced as the prize winner, Mr Thaler said the most important impact of his work is “the recognition that economic agents are humans” and money decisions are not made strictly rationally.
Mr Thaler had a cameo alongside pop star Selena Gomez in the film The Big Short, about the global financial crisis.
In the scene, he explains the “hot hand fallacy”, in which people think whatever is happening now is going to continue to happen into the future.
Asked at the news conference on Monday if he thought this observation applied to US president Donald Trump, who had success as a business executive before entering politics, he said: “As to President Trump, I think he would do well to watch that movie.”
In 2008, Mr Thaler co-wrote a paper examining the choices contestants face in games such as the TV show Deal Or No Deal, including about how early outcomes affect decisions later in the game.
In the paper, Mr Thaler and the authors said that contestants become bolder in their choices when their initial expectations of how much they would win are shattered, whether by big losses or big gains.
On Monday, Mr Thaler told the news conference he will likely use the prize money in ways consistent with his research.
“I will say that I will try to spend it as irrationally as possible,” he said.
The Sveriges Riksbank (Swedish National Bank) Prize in Economic Sciences in Memory of Alfred Nobel was first awarded in 1969, nearly seven decades after the series of prestigious prizes that Nobel called for.
Despite its provenance and carefully laborious name, it is broadly considered an equal to the other Nobel and the winner attends the famed presentation banquet.
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