Our Thoughts

Behavioral Economics Pioneer Wins Nobel Prize

Professor Richard Thaler of the University of Chicago was today awarded the Nobel Prize in Economics for his groundbreaking research into the psychology of economic behavior. Contrary to earlier thought, Professor Thaler determined not only that people do not behave rationally, but that they react irrationally in consistent and predictable ways. His theories of “mental accounting” and “the endowment effect” (which are more fully explained in this article) have also been instrumental in directing public policy.