Richard Thaler facts for kids
Quick facts for kids
Richard Thaler
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Thaler in 2015
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| Born | September 12, 1945 East Orange, New Jersey, U.S.
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| Education | Case Western Reserve University (BA) University of Rochester (MA, PhD) |
| Spouse(s) | France Leclerc |
| Children | 3 |
| Awards | Nobel Memorial Prize in Economic Sciences (2017) |
| Scientific career | |
| Fields | Behavioral economics, Behavioral finance, Nudge theory |
| Institutions | University of Rochester Cornell University University of Chicago |
| Thesis | The Value of Saving a Life: A Market Estimate (1974) |
| Doctoral advisor | Sherwin Rosen |
Richard H. Thaler (born September 12, 1945) is an American economist. He is a professor at the University of Chicago Booth School of Business. In 2015, Thaler was the president of the American Economic Association.
Thaler is known for his work in behavioral economics. This field studies how people's feelings and thinking habits affect their economic decisions. He worked with famous psychologists Daniel Kahneman and Amos Tversky to help develop this field. In 2018, he became a member of the National Academy of Sciences.
In 2017, he won the Nobel Memorial Prize in Economic Sciences. He received it for his important work in behavioral economics. The Royal Swedish Academy of Sciences said his work "built a bridge" between economics and psychology. His ideas helped create the new field of behavioral economics.
Contents
About Richard Thaler's Life
Richard Thaler was born in East Orange, New Jersey. His mother was a teacher and real estate agent. His father worked as an actuary, which is someone who studies financial risks. Thaler grew up with two younger brothers. He has three children from his first marriage. He is now married to France Leclerc, who was a marketing professor.
Richard Thaler's Education
Thaler went to Newark Academy for high school. He earned his bachelor's degree in 1967 from Case Western Reserve University. Later, he received his master's degree in 1970 and his PhD in 1974. Both of these degrees were from the University of Rochester. His PhD paper was about "The Value of Saving A Life: A Market Estimate."
Richard Thaler's Career in Academia
After finishing his studies, Thaler started his teaching career. He became a professor at the University of Rochester.
Early Research and Collaborations
From 1977 to 1978, Thaler spent a year at Stanford University. There, he worked with Daniel Kahneman and Amos Tversky. They helped him understand many economic puzzles he had found. These puzzles showed how people often act in ways that traditional economics couldn't explain. One example is the endowment effect, where people value things they own more highly.
From 1978 to 1995, he taught at Cornell University. Cornell even started a center for behavioral economics in 1989. Thaler was its first director.
Moving to the University of Chicago
Thaler became well-known for writing a regular column called Anomalies. These columns appeared in the Journal of Economic Perspectives. In 1995, he was offered a job at the University of Chicago's Booth School of Business. He has taught there ever since.
Richard Thaler's Books and Writings
Thaler has written several books for general readers. These books explain behavioral economics in an easy-to-understand way.
Books on Behavioral Economics
His books include Quasi-rational Economics and The Winner's Curse. In his books, Thaler often points out that traditional economics is incomplete. He says that "conventional economics assumes that people are highly-rational—super-rational—and unemotional." He believes people are not always like computers. They have feelings and sometimes struggle with self-control.
Thaler also co-wrote Nudge: Improving Decisions About Health, Wealth, and Happiness (2008) with Cass Sunstein. This book talks about how organizations can help people make better choices. Thaler and Sunstein explain that people often make poor choices. This happens because humans have many common biases. These biases can lead to mistakes in areas like money, health, and education. They created the term "choice architecture" to describe how choices are presented.
Thaler supports an idea called "libertarian paternalism." This means creating policies that guide people to make good decisions. However, these policies do not take away people's freedom to choose. An example is how retirement savings plans are set up. If joining the plan is the default option, many more people participate. This is a "nudge" that helps people save for the future.
In 2015, Thaler wrote Misbehaving: The Making of Behavioral Economics. This book tells the story of how behavioral economics developed. It also shares some of his own experiences.
Other Important Writings
Thaler wrote a column called Anomalies from 1987 to 1990. In this column, he wrote about economic behaviors that didn't fit traditional economic ideas.
He also studied choices made by contestants on TV game shows. For example, he looked at Deal or No Deal and Golden Balls. His research showed how people's willingness to take risks can change.
Thaler has also written articles for The New York Times. He suggests economic solutions for financial problems.
Nobel Memorial Prize in Economics
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In 2017, Richard Thaler won the Nobel Memorial Prize in Economic Sciences. He received it for adding realistic ideas about human psychology to economic studies. He showed how human traits like limited rationality, social preferences, and lack of self-control affect decisions. These traits also impact how markets work.
Thaler said that much of the work he won the prize for was done during his years at Cornell University. Professor Peter Gärdenfors, a member of the prize committee, said Thaler had "made economics more human."
After winning, Thaler said his most important contribution was showing that "economic agents are human." He joked that he planned to spend his prize money "as irrationally as possible."
Paul Krugman, another Nobel winner, praised Thaler's work. He called behavioral economics "the best thing to happen to the field in generations." However, not everyone agreed. Some economists still question mixing psychology with economics. But many agree that Thaler's ideas have led to important insights in many areas.
Other Awards and Honors
Besides the Nobel Prize, Thaler has received many other honors. He is a member of the National Academy of Science. He is also a Fellow of the American Finance Association.
Behavioral Finance and Policy Applications
Thaler also helped start an asset management company called Fuller & Thaler Asset Management. This company believes that investors can use knowledge about human biases to make smart choices. Thaler has been a principal at the firm since 1999.
For 30 years, Thaler was a co-director of the National Bureau of Economic Research Behavioral Economics Project.
He also helped create the Behavioural Insights Team. This team started in the British Government. It uses behavioral science to improve public policies.
Thaler even made a short appearance in the 2015 movie The Big Short. This movie was about the 2008 financial crisis. In the film, he helped pop star Selena Gomez explain the 'hot hand fallacy.' This is the idea that people believe something happening now will keep happening in the future.
See also
- List of Jewish Nobel laureates
