Photo of Richard H. Thaler is displayed on the screen during the press conference to announce the winner of the 2017 Nobel Prize in Economics in Stockholm, Sweden, on Oct. 9, 2017. (Xinhua/Shi Tiansheng)
The 2017 Nobel Prize in Economics, or officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, was awarded to Richard H. Thaler "for his contributions to behavioural economics," announced the Royal Swedish Academy of Sciences on Monday.
Peter Gardenfors, member of the committee for the Economics Prize said, Thaler's achievements successfully integrated economics and psychology, as he made economics "more human." And his theories "help people make better economic decisions."
Thaler, woken up early in the morning, told Xinhua at the press conference through telephone interview that he is currently focused on researches on "nudging" and the Swedish pension system. And he said he had not planned very far about his future researches.
Swedish Royal Swedish Academy of Sciences said in its statement that, Richard H. Thaler has incorporated psychologically realistic assumptions into analyses of economic decision-making. By exploring the consequences of limited rationality, social preferences, and lack of self-control, he has shown how these human traits systematically affect individual decisions as well as market outcomes.
Richard Thaler's 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 behavioural economics, which has had a profound impact on many areas of economic research and policy, the statement added.
As one of the founders of the field of behavioural finance, which studies how cognitive limitations influence financial markets, Thaler discovered "limited rationality" in people's financial decision-making.
Thaler's theoretical and experimental research on fairness has been influential. He showed how consumers' fairness concerns may stop firms from raising prices in periods of high demand, but not in times of rising costs.
He also showed how to analyze self-control problems using a planner-doer model, which is similar to the frameworks psychologists and neuroscientists now use to describe the internal tension between long-term planning and short-term doing, according to the statement.
Richard H. Thaler, born 1945 in the United States, is Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics, at the University of Chicago Booth School of Business, USA.
This year's prize is 9 million SEK (1.1 million U.S. dollars).