Richard Thaler

Richard Thaler

Professor of Behavioral Science and Economics, University of Chicago Booth School of Business

Richard H. Thaler, winner of the Nobel Prize in Economic Sciences in 2017, wears two hats: professor of behavioral science and economics at the University of Chicago Booth School of Business, and principal at Fuller & Thaler Asset Management Inc. The latter is a registered investment adviser that serves institutional investors by applying behavioral economics to investment management. The firm also hosts a mutual fund of Mr. Thaler's design.

He is best known for pioneering and popularizing the field of behavioral economics, and, as such, was awarded the Nobel Prize for "integrating economics with psychology."

The award was a wake-up call, literally.

"On the day [of the announcement] my phone rang at 4 a.m. ... reading simply, SWEDEN," Mr. Thaler said, referring to his phone's caller ID. "After giving you the good news, they ask you to make coffee, because there will be a live press conference in Stockholm ... in 45 minutes! There has barely been a letup since."

Why have behavioral considerations not been a bigger part of economic theory since the beginning?

It started out that way, he said.

"But people [and their behavior] started to disappear from economics in the mathematical revolution that began after World War II. By the time I was in graduate school in the 1970s, the people in economic models were really smart and had no self-control problems. That seemed unrealistic to me," Mr. Thaler said.

Did he always question the way things were?

"Yes, I think I was probably a pain in the ass in school. I was always questioning why we did things," he said. "I would invent new rules for kids' games, but schools did not let me change their rules. As a result I was never a great student."

Deborah Nason

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