Podcast on the Nudge Nobel

How Richard Thaler’s ‘Simple Insights’ Led to a Nobel Prize
Wharton's Katherine Milkman discusses the awarding of the Nobel Prize to behavioral economist  

Richard H. Thaler, the “father of behavioral economics,” has this week won the 2017 Nobel Prize in Economics for his work in that field. Thaler has long been known for challenging a foundational concept in mainstream economics — namely, that people by-and-large behave rationally when making purchasing and financial decisions. Thaler’s research upended the conventional wisdom and showed that human decisions are sometimes less rational than assumed, and that psychology in general — and concepts such as impulsiveness — influence many consumer choices in often-predictable ways.

Once considered an outlier, behavioral economics today has become part of generally accepted economic thinking, in large part thanks to Thaler’s ideas. His research also has immediate practical implications. One of Thaler’s big ideas – his “nudge theory”  – suggests that the government and corporations, to take one example, can greatly influence levels of retirement savings with unobtrusive paperwork changes that make higher levels of savings an opt-out rather than an op-in choice. In fact, he co-authored a book, Nudge: Improving Decisions About Health, Wealth and Happiness, which became a best-seller.

In this Knowledge@Wharton interview, Katherine Milkman, a Wharton professor of operations, information and decisions — and a behavioral economist herself — discusses Thaler’s influence in economics and the practical applications of his ideas already underway. She attributes part of his success to his great clarity in thinking and in writing. She had interviewed professor Thaler for Knowledge@Wharton in 2016 regarding his then-new book, Misbehaving: The Making of Behavioral Economics.  ... "