The economics of Richard Thaler

Thaler along with his pioneering colleagues showed that the mistakes that people made—contrary to what mainstream economists believed—were not random. Instead, some such mistakes were predictable and led to systemic society-wide issues, which could be corrected by correcting incentives, or “nudging” people to slightly modify their behaviour.

Thaler’s dissertation supervisor, the renowned economist Sherwin Rosen, despite co-authoring the 1976 paper with him, was not quite impressed with the young economist, later telling The New York Times, “We did not expect much of him.”

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