1 . NOBEL PRIZE IN ECONOMICS 2017
SOURCE – HINDU
RELEVANCE – GS PRELIMS
- U.S. economist Richard Thaler won the Nobel Economics prize on Monday for showing that economic and financial decision-makers are not always rational, but mostly deeply human.
- Bridging the gap between economics and psychology, Mr. Thaler’s research focuses on behavioural economics, which explores the impact of psychological and social factors on decisions by individuals or groups in the economy and financial markets.
- Mr. Thaler is well-known for co-founding the “nudge” theory, which demonstrates how people can be persuaded to make decisions that leave them healthier and happier.
- 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.
- 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.
- One of the founders of behavioural finance, which studies how cognitive limitations influence financial markets, Mr. Thaler developed a model for explaining how people tend to focus on the narrow impact rather than the overall effect of each decision they make, which is called limited rationality.
KNOW ABOUT THE PRIZE
- The Nobel Memorial Prize in Economic Sciences or the Swedish National Bank’s Prize in Economic Sciences in Memory of Alfred Nobel), commonly referred to as the Nobel Prize in Economics is an award for outstanding contributions to the field of economics, and generally regarded as the most prestigious award for that field.
- The prize was established in 1968 by a donation from Sweden’s central bank, the Swedish National Bank, on the bank’s 300th anniversary.
- Although it is not one of the prizes that Alfred Nobel established in his will in 1895, it is referred to along with the other Nobel Prizes by the Nobel Foundation.
- Laureates are announced with the other Nobel Prize laureates, and receive the award at the same ceremony.
- Laureates in the Memorial Prize in Economics are selected by the Royal Swedish Academy of Sciences.
- It was first awarded in 1969 to the Dutch and Norwegian economists Jan Tinbergen and Ragnar Frisch.