Mumbai: While the world watched U.S. economist Richard Thaler win the Nobel prize for economics on Monday, little is known about how the Modi government has been putting his famous "Nudge economics" theory into practice for a while now. That incorporates more realistic analysis of how people think and behave when making economic decisions, it said.
His research on "fairness", which showed how consumer concerns might stop firms from raising prices in periods of high demand, but not in times of rising costs, also has been influential, according to the Swedish academy. His best-known work, "Nudge", written together with Cass R. Sunstein, explored the concept of tackling societal hurdles by applying behavioral economics.
Thaler was born 1945 in East Orange, New Jersey and received his Ph.D.in 1974 from the University of Rochester, New York. Former Reserve Bank of India governor Raghuram Rajan is the Katherine Dusak Miller Distinguished Service Professor of Finance at the University of Chicago Booth School of Business.
The academy said his work has "built a bridge between the economic and psychological analyses of individual decision-making".
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The Swedish National Bank Prize in Economic Sciences in Memory of Alfred Nobel was first granted to its first recipients, Ragnar Frisch of Norway and Jan Tinbergen of the Netherlands, nearly 70 years after the series of prestigious prizes that Nobel helped establish through funding set aside in his will.
Last year, the award went to British-American economist Oliver Hart and Bengt Holmstrom of Finland for their research on contract theory, which has helped design insurance policies and executive pay. Three of the prize committees are within the sciences academy. The economics award brings to an end this year's Nobel prize cycle.
The 72-year-old takes home a nine million kronor (944,000 euros, $1.1 million) prize sum.