Chicago Booth Add to Their Nobel Prize Haul

Richard Thaler

The last week has seen the winners of the 2017 Nobel Prizes announced, the most recent of which being the Nobel Memorial Prize in Economic Sciences.

Richard Thaler of the University of Chicago Booth School of Business has been awarded for his studies into behavioral economics and how his work enables people to exercise better self-control with their money. He co-wrote the best seller Nudge: Improving Decisions About Health, Wealth, and Happiness with Cass Sunstein, a professor at Harvard. The book highlights the reasons why people make irrational or poor choices and how they can be ‘nudged’ into planning more for the long-term; such as saving for a pension.

A professor of behavioral science and economics at Booth, Thaler served as an advisor to the UK government during David Cameron’s leadership, concentrating on how ideas from behavioral economics can be incorporated into policy design. In recent times he also worked with the Swedish government in an attempt to improve the design of its pensions system.

His theories on behavioral economics can be applied to both miniature and individual situations such as the willingness to spend more money on a debit card than cash in a shop, as well as wider societal actions, such as Brexit. In the case of the latter, he argued rational decision making was overlooked by the influence of gut choices.  

Oh, and who can forget his cameo in the 2015 film The Big Short, in which he appeared alongside Selena Gomez to illustrate the concept of synthetic collateralized debt obligations and the role they played in the financial crisis of 2007-2008.

Chicago Booth dominates Nobel Memorial Prize in economics

On Thaler receiving this year’s award, the Royal Swedish Academy of Sciences reasoned that “[His] contributions have built a bridge between the economic and psychological analyses of individual decision-making…His empirical findings and theoretical insights have been instrumental in creating the new and rapidly expanding field of behavioral economics."

Thaler becomes the eighth Chicago Booth faculty member to win the Nobel in economics since its inception in 1968 following George Stigler (1982), Merton Miller (1990), Ronald Coase (1991), Gary Becker (1992), Robert Fogel (1993), Myron Scholes (1997) and Eugene Fama (2013). The school has now provided over 10% of all the award’s winners.

Thaler adds to a strong showing from the University of Chicago for Nobel Prizes in general, who currently sit fifth on the list of most Nobel laureates by university affiliation. This ranks them above notable and prestigious institutions such as University of Oxford, Stanford University, Yale University and University of Paris to name just a few.

Congratulations to Thaler who has promised to spend his prize of SK9 million (US$1.1 million), “as irrationally as possible”.

*Main image accredited to Chatham House | flickr

phil_cottrell
Written by Phil Cottrell

Phil is the editor of TopMBA.com and has a breadth of editorial and digital marketing experience. He has worked across a variety of industries from e-commerce and commercial real estate to managing all content for a C-suite careers site aimed at UK and US professionals.

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