Raghuram Rajan misses out on Nobel, Richard Thaler wins Nobel for Economics

Gladys Abbott
October 10, 2017

An American academic whose research into behavioural economics showed people do not always make rational financial decisions has been awarded the 2017 Nobel Economics Prize. The field of behavioral economics has had already a great impact on much economic research's and policy's regions.

U.S. economist Richard Thaler on October 9, 2017 won the Nobel Economics Prize for his pioneering work on the psychology of economics, the jury said.

The prize committee in recent years has mostly honored economists for careful work on narrow questions.

Today's award is unique in that it is the only Nobel Prize not included in Alfred Nobel's last will and testament. "He's made economics more human".

Indeed only one women - Elinor Ostrom in 2009 - has won the economics prize to date, and not a single individual women won any Nobel award in 2017. The total amount for each of the 2017 prizes is 9 million kronor ($1.1 million), up from 8 million kronor a year ago.

The 72-year-old Richard Thaler is a professor at the University of Chicago. He has co-authored the global best seller Nudge (2008) in which he tackled many of society's major problems through the concepts of behavioral economics.

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Thaler is particularly well known for his work on "nudge theory", a term he coined to help explain how small interventions can encourage individuals to make different decisions.

Only one woman has been awarded the Prize in Economic Sciences so far however - Elinor Ostrom in 2009.

The United States has dominated the economics prize, with American economists accounting for roughly half of the laureates since the inception of the award.

Last year's winners were Oliver Hart, a professor at Harvard, and Bengt Holmstrom, a professor at the Massachusetts Institute of Technology, for work that has improved the design of contracts.

Thaler appeared in a memorable cameo alongside Selena Gomez in the Christian Bale-, Steve Carrell-starring 2015 financial-crisis chronicle The Big Short.

When asked what he planned to do with the SEK 9m in prize money he was set to receive, Thaler said, "I will try to spend it as irrationally as possible!"

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