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)
When economics professor Richard Thaler was waken up by a phone call at 4 a.m. on Monday, he felt excited rather than being annoyed -- The phone number was from Sweden.
"I had a pretty good idea what that might be," he told a press conference on Monday at the Booth School of Business in the University of Chicago.
He has been awarded the 2017 Nobel Prize in Economic Sciences for his contributions to behavioral economics, a relatively new field that bridges the gap between economics and psychology. The award was especially meaningful because behavioral economics was "really out in the wilderness 40 years ago," as Thaler himself put it.
Described as "the father of behavioral economics," Thaler wrote Misbehaving: The Making of Behavioral Economics and Nudge: Improving Decisions About Health, Wealth and Happiness. Both books became best-sellers.
In the latter, he explained that being human, people are susceptible to various biases that can lead to mistakes, which make you poorer and less healthy.
With co-author Cass Sunstein from Harvard Law School, Thaler pointed out in the book that some choice environments can be designed to make it easier for people to choose what is best for themselves, their families, and their society.
Putting healthier foods on a higher shelf, for example, can increase sales. No matter whether customers do or don't know obesity problems, they can easily choose the healthier foods that are in their eye line.
Similarly, schools can nudge boys and girls toward healthy food choices by putting fruit at eye level in the cafeteria.
The nudge theory has prompted the British government to establish a Behavioral Insight Team, dubbed "Nudge Unit," in 2010 to create policies that nudge British citizens to make better choices, thus to save the state budget in the long-run. "If you want to get people to do something, make it easy. Remove the obstacles," Thaler explained.
Chicago Booth Dean Madhav Rajan spoke highly of Thaler's contribution to the business school.
Based on the nudge theory, a combination of psychology and economics, Thaler has not only produced knowledge with enduring impact to influence and educate current and future leaders, but also vastly expanded the school's footprint and stature in this field, said Rajan.
Before joining the University of Chicago faculty in 1995, Thaler taught at the University of Rochester and Cornell University. He served as the president of American Economic Association in 2015.
Thaler is the 90th scholar associated with the University of Chicago to win a Nobel Prize.
However, his easy-to-understand scenarios have not been easily accepted by some of his fellow economists.
So he has been making attempts to make his theory appealing to young scholars, "whose minds aren't already made up," he told a packed audience comprising members of the press, students and faculty.
"Many great, young economists have embraced behavioral economics," he added.
A humorous Thaler also quipped that after he won the Nobel Prize, "this is the first time that the (university) president and dean had a conversation about me where the phrase 'pain in the ass' was not mentioned."