Economy

Nobel Economist Takes a Jab at Trump's Confidence, Knowledge

Nobel Economist Takes a Jab at Trump's Confidence, Knowledge

An Illinois professor won the Nobel prize in economics Monday for his groundbreaking research into why people make bad money decisions.

"By exploring the consequences of limited rationality, social preferences, and lack of self-control", Thaler "has shown how these human traits systematically affect individual decisions as well as market outcomes", the Swedish Academy said. That “incorporates more realistic analysis of how people think and behave when making economic decisions, ” it said.

Richard Thaler, of the University of Chicago, was speaking in a phone call to a news conference immediately after the Nobel committee announced he is the victor of this years 9-million-kronor ($1.1-million) prize.

The award committee said Thaler was chosen "for his contributions to behavioral economics".

Richard Thaler works as a professor of Behavioral Science and Economics at the University of Chicago.

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David Laibson, chair of Harvard University's economics department, said many of Thaler's theories have been widely applied by business and government, aiming to get individuals to do a range of actions such as paying parking tickets and getting flu shots.

Influential in academic circles, the movie-going public may have noticed Thaler make a brief cameo in the 2015 film "The Big Short", explaining the so-called "hot-hand fallacy" where past success is expected to also warrant success in the future, with pop star Selena Gomez.

"I don't know about you, but I'm nervous, and it seems like when investors are nervous, they're prone to being spooked", Mr. Thaler said, "Nothing seems to spook the market" and if the gains are based on tax-reform expectations, "surely investors should have lost confidence that that was going to happen".

Thaler receives about $1.1 million for winning the award.

The economics prize is unique among the Nobel awards in that it was created by the Swedish central bank in 1968 - the others were all set up through the 1895 will of Swedish inventor and philanthropist Alfred Nobel.