Richard Thaler’s prize isn’t noble.
RICHARD THALER WON the 2017 Nobel Memorial Prize in Economics. It’s not an original Nobel prize, as recipients in the other fields will be glad to inform you. Alfred Nobel detested economics. Nonetheless, since 1969, some 79 prizes have been given by the Swedish National Bank to economists, and one to a psychologist in economists’ clothing.
Thaler is distinguished but not brilliant, which is par for the course. He works on “behavioral finance,” the study of mistakes people make when they talk to their stock broker. He can be counted as the second winner for “behavioral economics,” after the psychologist Daniel Kahneman. His prize was for the study of mistakes people make when they buy milk.
Thaler’s is the 10th Nobel for finance. (What, labor economics doesn’t exist? Public finance is chopped liver? One lonely prize for economic history?) It’s also the 29th for an economist associated in one way or another with my beloved University of Chicago. Yet Thaler is not of the famed “Chicago School,” which thinks the mistakes people make when buying milk or talking to their stock brokers are not all that important for how and why markets and trade work.
The Committee wrote that by “exploring the consequences of limited rationality, social preferences, and lack of self-control, he has shown how these human traits systematically affect individual decisions as well as market outcomes.” I object to the market outcomes part. His work is not about markets. It’s about the mistakes you make all the time, you idiot. Along with his fellow behavioral economists, Thaler is reinventing individual psychology.
One might wonder why he would go to the trouble of doing so, and then claim, with no evidence, that individual mistakes discernible with the methods of individual psychology matter greatly for market outcomes.
Diese Geschichte stammt aus der March 2018-Ausgabe von Reason magazine.
Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.
Bereits Abonnent ? Anmelden
Diese Geschichte stammt aus der March 2018-Ausgabe von Reason magazine.
Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.
Bereits Abonnent? Anmelden
Gimme Shelter - The U.S. confronts a growing homelessness problem. Does Miami have the answer?
The U.S. confronts a growing homelessness problem. Does Miami have the answer?
AI Is Coming for Hollywood's Jobs
But so is everyone else.
AI Can Do Paperwork Doctors Hate
With help from AI, doctors can focus on patients.
Antitrust May Smother the Power of AI
Left alone, AI could actually help small firms compete with tech giants.
A Brief, Biased History of the Culture Wars
THE FIRST PAR AGR APH of the book jacket lays it out: “There is a common belief that we live in unprecedented times, that people are too sensitive today, that nobody objected to the actions of actors, comedians, and filmmakers in the past.
FAMILIES NEED A VIBE SHIFT
THE AUTHORS OF FOUR NEW BOOKSWITH 24 KIDS BETWEEN THEM-SAY THE AMERICAN FAMILY NEEDS A COURSE CORRECTION.
"The Past Is There To Teach Us What Can Happen'
Hardcore History's Dan Carlin on hero worship and moral assumptions in the study of the past
Cutting Off Israel
ENDING U.S. AID WOULD GIVE WASHINGTON LESS LEVERAGE IN THE MIDDLE EAST. THAT’S WHY IT’S WORTH DOING.
WHAT CAUSED THE D.C.CRIME WAVE?
GOVERNMENT MISMANAGEMENT, NOT SENTENCING REFORM OR SPARSE SOCIAL SPENDING, DESERVES THE BLAME.
States Turn Their Backs on Criminal Justice Reform
IT WAS IMPOSSIBLE to avoid the “strange bedfellows” cliché when reading about the criminal justice reform movement in the 2010s.