AP: Richard Thaler wins Nobel for work in behavioral economics

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The AP is reporting, “The Nobel prize in economics was awarded Monday to Richard Thaler of the University of Chicago for research showing how people’s choices on economic matters — whether on savings or game shows like “Deal or No Deal” — are not always rational.

Thaler won the 9-million-kronor ($1.1-million) prize for “understanding the psychology of economics,” Swedish Academy of Sciences secretary Goran Hansson said Monday.

Thaler is considered a founding father of behavioral economics, a field that shows that far from being the rational decision-makers described in economic theory, people often make choices that don’t serve their best interests. That could include, for example, refusing to cut their losses when their investments plunge in value or making big bets at the casino because they are convinced their hot streak will continue…”

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