Richard Thaler, PhD Founding Father of Behavioral Economics

Abstract

Richard Thaler is considered one of the founding fathers of behavioral economics, the nexus of economics and psychology—specifically how people and organizations make decisions that have negative consequences and how they frequently repeat these mistakes. Years of observing human behavior have convinced Thaler that efficient-market-based economic theories are inadequate because they fail to account for the fact that investors do not always act rationally or logically. In the best-selling book Nudge, Thaler and co-author Cass Sunstein explored how people make choices and what processes and structures might lead to better choices. In Nudge, Thaler and Sunstein advocate strategies that do not force anyone to do anything, yet effectively promote good choices.

In June 2014, Professor Thaler spoke with members of the Journal of Investment Consulting Editorial Advisory Board about his work in behavioral economics and finance.

Keywords: Richard Thaler

JEL Classification: G10, G11