Richard Thaler

Economics speaker Richard Thaler won the Nobel Prize for his study of behavioural economics and the psychology of decision-making. A natural storyteller and sparking public speaker, Richard Thaler continues to challenge the mainstream in his popular keynote addresses.

Much of contemporary economics rests on the assumption that our economy is a rational system driven by self-interest. Richard Thaler has spent his career challenging that assumption, identifying irrational factors that shape our economy.

One of his most famous observations studied the effect of automatic vs. optional enrolment in retirement plans. In a completely rational system populated by self-interested actors, automatic and optional enrolment should be equally popular. But previous studies had already shown that default enrolment raised participation from 49% to 84%.

This myopia extends to a wide range of economic decision-making. In 1985, Thaler considered two stock portfolios, one full of stocks that had recently declined, the other of winners. Because investors overrespond to recent news, they valued recent losers too poorly, and winners too well. Over the course of the study, the “loser” portfolio easily outpaced the portfolio of “winners.”

With his colleague at the University of Chicago, law professor Cass Sunstein, Thaler considered his work’s public-policy implications. Their 2008 book Nudge argue that government can establish constructive defaults while still preserving options for individual choice. His 2015 book Misbehaving sums up his adventures in economics and argues for a new, more humanistic economic paradigm.

Since 1995, Thaler has taught at the University of Chicago’s Booth School of Business. Previously, he taught at the University of Rochester and Cornell University.