Nobel prize 2017 in Economics awarded to American Richard Thaler

The 2017 Nobel prize in economics has been awarded to American academic Richard Thaler.

Richard Thaler is from the University of Chicago and has been given the prestigious award for his remarkable contributions to behavioural economics.

The announcement from the Royal Swedish Academy of Sciences in Stockholm on Monday said that Thaler "has incorporated psychologically realistic assumptions into analyses of economic decision-making. By exploring the consequences of limited rationality, social preferences, and lack of self-control, he has shown how these human traits systematically affect individual decisions as well as market outcomes".

Thaler has authored books titled Nudge and Misbehaving: The Making of Behavioral Economics.

Among his contributions are his "theory of mental accounting, explaining how people simplify financial decision-making by creating separate accounts in their minds, focusing on the narrow impact of each individual decision rather than its overall effect," the Academy said.

Talking about the prize money he won, Thaler said that he would try to spend it as irrationally as possible.

The economics prize, officially called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, was established in 1968. It was not part of the original group of awards set out in dynamite tycoon Nobel’s 1895 will.