The Nobel prize in Economic Sciences has been awarded to Richard Thaler, one of the founding father’s of ‘nudge’ theory in behavioural economics. Thaler is a professor at the University of Chicago Booth School of Business. While he may be making headlines right now for the Nobel Prize, Thaler gained popularity after his book with Cass Sunstein, ‘Nudge’ became a bestseller and after his cameo in the film ‘The Big Short’ where he explained synthetic collateralized debt obligations (CDOs) alongside Selena Gomez.
Thaler was lauded for incorporating psychological assumptions into analyses of economic decisions, so, what better time is there to try and figure out what exactly is behavioural economics?
Take a look at the video to understand the basics of behavioural economics and how a lot of our assumptions in classical economics don’t hold true.