Richard Thaler

University of Chicago Booth School of Business

Richard Thaler is an American economist and Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics at the University of Chicago Booth School of Business. He was awarded the 2017 Nobel Prize in Economic Sciences for his contributions to behavioral economics, a field he helped found by systematically integrating insights from psychology into economic analysis. Thaler's research has documented and formalized a series of systematic departures from the predictions of standard rational choice theory. His theory of mental accounting explains how people organize financial transactions into different psychological accounts with different spending and saving rules, leading to seemingly irrational financial behaviors. His work on the endowment effect and loss aversion showed experimentally that people value objects they own more highly than identical objects they do not own—a violation of the Coase theorem. With Daniel Kahneman and Jack Knetsch, he demonstrated that people have strong preferences for fair pricing and will incur costs to punish firms perceived as taking unfair advantage. Perhaps most influentially, his concept of nudge—developed with legal scholar Cass Sunstein in their bestselling book Nudge—introduced the idea that subtle changes in the way choices are presented (choice architecture) can dramatically improve outcomes without restricting freedom of choice. Save More Tomorrow (SMarT), a retirement savings program based on his behavioral insights, has helped millions of Americans increase their retirement savings. He is a co-founder of Fuller and Thaler Asset Management.