Richard Thaler wins the Nobel prize for economic sciences
An economist who recognises that human behaviour is not always strictly rational
THE credit-card bill arrives. You have enough money in a savings account to pay it off—the sensible thing to do, arithmetically speaking, since the interest rate on the credit-card balance far exceeds that earned on the savings. Yet you leave the savings untouched, and pay only as much of the bill as your current-account balance allows. What looks a daft choice to most economists makes perfect sense to Richard Thaler, who on October 9th was awarded the Nobel prize for economics for his work in behavioural economics. Mr Thaler helped demonstrate how human reasoning diverges from that of the perfectly rational homo economicus used in most economic modelling. The world, and the field of economics, is better for his contributions.
This article appeared in the Finance & economics section of the print edition under the headline “Reasonable doubt”
Finance & economics October 14th 2017
- Technology is revolutionising supply-chain finance
- The finance industry ten years after the crisis
- Brexit will give the derivatives market a nasty headache
- The internationalisation of China’s currency has stalled
- In dirt-poor Myanmar, smartphones are transforming finance
- BBVA, a Spanish bank, reinvents itself as a digital business
- Richard Thaler wins the Nobel prize for economic sciences
From the October 14th 2017 edition
Discover stories from this section and more in the list of contents
Explore the editionDiscover more
The great-man theory of Wall Street
Why finance is still dominated by bold individuals
Hong Kong’s property slump may be terminal
Demographics and geopolitics will make a recovery harder
Why everyone wants to lend to weak companies
An unanticipated side-effect of Donald Trump’s election victory
American veterans now receive absurdly generous benefits
An enormous rise in disability payments may complicate debt-reduction efforts
Why Black Friday sales grow more annoying every year
Nobody is to blame. Everyone suffers
Trump wastes no time in reigniting trade wars
Canada and Mexico look likely to suffer