An economist known for studying the irrational decisions people make with their money won this year’s Nobel prize in economics.
Richard Thaler of the University of Chicago won the 9-million-kronor ($1.1-million) prize this week for his work in a field he helped found called “behavioral economics.”
“He changed economics, and he changed the world,” said Harvard Law School professor Cass Sunstein, one of Thaler’s collaborators.
Far from being the rational decision-makers described in classical theory, Thaler found people often make decisions that don’t serve their best interests.
For instance, many Baby Boomers haven’t saved enough for retirement. And Americans kept buying homes in the mid-2000s, creating a bubble that burst and triggered the Great Recession.
The 72-year-old economist joked after winning the prize that he intends to spend the money “as irrationally as possible.”
Thaler’s research earned him a cameo in the 2015 Oscar-nominated movie “The Big Short” about the global financial crisis. He’s also analyzed flawed strategies in the game show “Deal or No Deal,” and how school cafeterias should display their food for optimal health.