11 October, 2017
Mumbai: While the world watched USA economist Richard Thaler win the Nobel prize for economics on Monday, little is known about how the Modi government has been putting his famous "Nudge economics" theory into practice for a while now.
Thaler's theory of mental accounting, explaining how people simplify financial decision-making by focusing on the narrow impact of each individual decision rather than its overall effect, and his work on the so-called "endowment effect", showing how aversion to losses can explain why people value the same item more highly when they own it than when they don't, were also cited by the Academy.
The 72-year-old takes home a nine million kronor (944,000 euros, $1.1 million) prize sum.
UR Assistant Professor of Economics Asen Kochov described Thaler's foundational work in behavioral economics as "one of the main developments in economics in the last 50 years".
Thaler is a pioneer in behavioral economics, a research field in which insights from psychological research are applied to economic decision making, a background paper from the academy said.
Thaler co-authored a book with Harvard's Cass R. Sunstein called "Nudge: Improving Decisions about Health, Wealth, and Happiness".More news: Google Assistant has a male voice, here are the details
"I don't know about you, but I'm nervous, and it seems like when investors are nervous, they're prone to being spooked", he said, adding that "nothing seems to spook the market".
Thaler was born 1945 in East Orange, New Jersey and received his Ph.D.in 1974 from the University of Rochester, New York.
The economics prize, officially called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, was established in 1968.
The concept has now expanded to the United States and even Australia.
A University of Rochester graduate and former faculty member is the latest recipient of the Nobel Prize for economics.