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Integration of the Economy with Psychology: Richard H. Thaler, Nobel Prize of Economy 2017

Authors

  • José G. Vargas Hernández Universidad de Guadalajara, México

DOI:

https://doi.org/10.52292/j.estudecon.2018.1374

Keywords:

nudge, behavioral economics, endowment effect, mental accounting, limited rationality

Abstract

This paper aims to analyze the main contributions of Richard H. Thaler to the science of behavioral economics, which have been considered to grant him the Nobel Prize Sveriges Riksbank of Economics in 2017. His contributions incorporate psychology into the economic decision-making processes departing from instrumental rationality and the theory of rational choice to contribute to the generation of a new perspective in economic theory and economic policy. The method used is fundamentally analytical-descriptive based on a review of his main publications. Finally, it is concluded that Thaler and his collaborators exert a relevant infl uence when generating a new frame of reference to explain and predict economic results from an approximation of limited rational behavior, the theory of limited accounting and the model of planer-maker under the concept of nudge which have an impact on the design and implementation of public policies.

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References

Barberis, N., Huang, M., & Thaler, R. H. (2006). Individual Preferences, Monetary Gambles, and Stock Market Participation: A Case for Narrow Framing. American Economic Review, 96(4), 1069-1090

Barberis, N., Huang, M., & Thaler, R.H. (2003). A Survey of Behavioral Finance. In G.M. Constantinides, M. Harris, & R. Stulz (Eds.), Handbook of the Economics of Finance, (pp. 1051-1121). North Holland, Amsterdam: Elsevier Science B.V.

Benartzi, S. & Thaler, R. H. (1995). Myopic Loss-Aversion and the Equity Premium Puzzle. Quarterly Journal of Economics110(1), 75-92

Benartzi, S., & Thaler, R. H. (1999). Risk Aversion or Myopia? Choices in Repeated Gambles and Retirement Investments. Management Science, 45(3), 64-381

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Camerer, C. F., Babcock L., Loewenstein G., & Thaler, R. H. (1997). Labor Supply of New York City Cab Drivers: One Day at a Time. Quarterly Journal of Economics, 112(2), 407-442

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Jolls, C., Sunstein C., & Thaler, R. H. (1998). A Behavioral Approach to Law and Economics. 50 Stanford Law Review, 1471-1550

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Kahneman, D., Knetsch J. L., & Thaler, R. H. (1986b). Fairness as a Constraint on Profi t Seeking. American Economic Review, 76(4), 728-741

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Kurzban, R. (2012). Why Everyone (Else) Is a Hypocrite: Evolution and the Modular Mind. Princeton: Princeton University Press

Lamont, O. A. & Thaler, R. H. (2003). Can the Market Add and Subtract? Mispricing in Tech Stock Carve-outs. Journal of Political Economy, 111(2),227-268

Lee, C. M. C., Shleifer, A., & Thaler, R. H. (1991). Investor Sentiment and the Closed-End Fund Puzzle. Journal of Finance, 46(1), 75-109

Post T., van dem Assem M. J., Baltussen G., & Thaler, R. H. (2008). Deal or No Deal? Decision Making under Risk in a Large-Payoff Game Show. American Economic Review, 98(1), 38-71

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Thaler, R. H. (1974). The Value of Saving a Life: A Market Estimate. PhD thesis, University of Rochester

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Published

2018-12-29

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How to Cite

Vargas Hernández, J. G. (2018). Integration of the Economy with Psychology: Richard H. Thaler, Nobel Prize of Economy 2017. Estudios económicos, 35(71), 101–113. https://doi.org/10.52292/j.estudecon.2018.1374

Issue

Vol. 35 No. 71 (2018)

Section

Articles

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