Richard Thaler was yesterday awarded with the Nobel Prize in Economics. After the Nobel prize to psychologist Daniel Kahneman some years ago, it is the second direct recognition of this institution to the merits of behavioral economics, the discipline in the intersection between economics and psychology. Before Kahneman, and before people used the concept "behavioral economics," Herbert Simon, who coined the concept "bounded rationality" and worked on it, also received the prize, as a student of mine reminded me in class. It is debatable whether Thaler has more merits as a generic promoter of the idea in books for the general public (like "Nudge," written with the celebrity legal scholar Cass Sunstein), or as a deep social scientist with frontier contributions. But the prize is a recognition that behavioral economics is already part of the mainstream. Other scholars that have received the Nobel prize, like Jean Tirole, George Akerlof, Robert Fogel, Robert Shiller and Elinor Ostrom have also been influenced by these ideas. The Economist says that "From a renegade offshoot within economics departments just a few decades
ago, behavioural economics has gained an established place not only
within academia, but also within government departments around the
world. From Australia to America, as well as within organisations like
the World Bank and UN, the “nudging” approach has been copied. The Nobel
Committee’s decision to honour Mr Thaler is of course a recognition of
his personal achievements. But it is also a testament to the newfound
importance of his discipline." The New York Times has a nice collection of some of Thaler's columns, which I recommend.