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Richard H. Thaler (; born September 12, 1945) is an American economics and the Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics at the University of Chicago Booth School of Business. In 2015, Thaler was president of the American Economic Association.
Thaler is a theorist in behavioral economics. He has collaborated with Daniel Kahneman, Amos Tversky, and others in further defining that field. In 2018, he was elected a member in the National Academy of Sciences.
In 2017, he was awarded the Nobel Memorial Prize in Economic Sciences for his contributions to behavioral economics.Multiple sources:
In its announcement, the Royal Swedish Academy of Sciences stated that his "contributions have built a bridge between the economic and psychological analyses of individual decision-making. His empirical findings and theoretical insights have been instrumental in creating the new and rapidly expanding field of behavioral economics."Multiple sources:
Between 1977 and 1978, Thaler spent a year at Stanford University collaborating and researching with Daniel Kahneman and Amos Tversky, who provided him with the theoretical framework to fit many of the economic anomalies that he had identified, such as the endowment effect.
From 1978 to 1995, he was a faculty member at the SC Johnson College of Business at Cornell University. Cornell established in 1989 the Center for Behavioral Economics and Decision Research, with Thaler as founding director.
After gathering some attention with a regular column in the respected Journal of Economic Perspectives (which ran between 1987 and 1990) and the publication of these columns by Princeton University Press (in 1992), Thaler was offered a position at the University of Chicago's Booth School of Business in 1995, where he has taught ever since.
Thaler is coauthor, with Cass Sunstein, of (Yale University Press, 2008). Nudge discusses how public and private organizations can help people make better choices in their daily lives. "People often make poor choices—and look back at them with bafflement!" Thaler and Sunstein write. "We do this because, as human beings, we all are susceptible to a wide array of routine that can lead to an equally wide array of embarrassing blunders in education, personal finance, health care, mortgages and credit cards, happiness, and even the planet itself." Thaler and his co-author coined the term "choice architecture."
Thaler advocates for libertarian paternalism, which describes public and private social policies that lead people to make good and better decisions through "nudges" without depriving them of the freedom to choose or significantly changing their economic incentives. An example of this is the choice of default options in retirement savings plans. When joining the plan is made the default, roughly 90 percent of those eligible participate, much higher than if they have to actively join. However, Thaler and Sunstein argue that changing the default to agreeing to organ donation is not an effective policy for increasing organ transplants. Although the default "works" in that almost no one opts out, family members are still consulted before organs are removed, and the lack of an active opt out is (correctly) not considered a strong signal of the potential donor's true preferences. Instead they advocate "prompted choice" (ask for permission prominently) plus "first person consent" which stipulates that the wishes of active donors should be honored.
Thaler and Sunstein updated Nudge in 2021, removing some chapters from the original edition—such as those discussing legal frameworks for recognizing same-sex relationships—and adding new content, including a chapter on what they term “sludge.”
While nudges are intended to make good choices easier through thoughtful choice architecture, sludge refers to “any aspect of choice architecture consisting of friction that makes it harder for people to obtain an outcome that will make them better off (by their own lights).” Thaler and Sunstein cite examples like the difficulty of canceling subscriptions compared to signing up, mail-in rebates, and opaque pricing models. These practices are also commonly known as dark patterns. (2025). 9780525508526, Penguin Books, an imprint of Penguin Random House LLC. ISBN 9780525508526
In 2015 Thaler wrote , a history of the development of behavioral economics, "part memoir, part attack on a breed of economist who dominated the academy—particularly, the Chicago School that dominated economic theory at the University of Chicago—for much of the latter part of the 20th century."
In a 2008 paper, Thaler and colleagues analyzed the choices of contestants appearing in the popular TV game show Deal or No Deal and found support for behavioralists' claims of path-dependent . He has also studied cooperation and bargaining in the UK game shows Golden Balls and Divided.Multiple sources:
As a columnist for The New York Times News Service, Thaler has begun a series of economic solutions for some of America's financial woes, beginning with "Selling parts of the radio spectrum could help pare US deficit," with references to Thomas Hazlett's ideas for reform of the U.S. Federal Communications Commission (FCC) and making television broadcast frequency available for improving wireless technology, reducing costs, and generating revenue for the US government.
"Given the lag between when work is done and when the Nobel Prize is awarded in economics, it would be accurate to say that the prize was largely given for work I did in my Cornell years," Thaler said.
Immediately following the announcement of the 2017 prize, Professor Peter Gärdenfors, Member of the Economic Sciences Prize Committee, said in an interview that Thaler had "made economics more human".
After learning that he had won the Nobel Memorial Prize in Economics, Thaler said that his most important contribution to economics "was the recognition that economic agents are human, and that economic models have to incorporate that." In a nod to the sometimes-unreasonable behavior he has studied so extensively, he also joked that he intended to spend the prize money "as irrationally as possible."
Paul Krugman, the 2008 winner of the Nobel Memorial Prize in Economics, tweeted "Yes! Behavorial econ is the best thing to happen to the field in generations, and Thaler showed the way." However, Thaler's selection was not met with universal acclaim; Robert Shiller (one of the 2013 laureates and a fellow behavioral economist) noted that there are some economists who still view Thaler's incorporation of a psychological perspective within an economics framework as a dubious proposition. In addition, an article in The Economist simultaneously praised Thaler and his fellow behavioral colleagues while bemoaning the practical difficulties that have resulted from causing "economists as a whole to back away a bit from grand theorising, and to focus more on empirical work and specific policy questions."
In chronicling Thaler's path to Nobel Memorial Prize in Economics laureate, John Cassidy notes that although Thaler's "nudge" theory may not overcome every shortcoming of traditional economics, it has at least grappled with them "in ways that have yielded important insights in areas ranging from finance to international development".
Thaler co-founded and served with Robert Shiller as the co-director of the National Bureau of Economic Research Behavioral Economics Project from 1991 to 2015.
Thaler was also involved in the establishment of the Behavioural Insights Team, which was originally part of the British Government's Cabinet Office but is now a limited company.
Thaler made a cameo appearance as himself in the 2015 movie The Big Short, which was about the Economic bubble and real estate bubble collapse that led to the 2008 financial crisis. During one of the film's expository scenes, he helped Pop icon Selena Gomez explain the 'Hot-hand fallacy,' in which people believe that whatever is happening now will continue to happen in the future. As a consequence of his appearance in the film, Thaler has an Erdős–Bacon number of 5.
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