US economist Richard H Thaler. Photo: AFP
US economist Richard H. Thaler got Nobel in Economics this year for the psychological analysis of economic behavior. In a variety of cases, eight American researchers were awarded the Nobel Prize. Today the Royal Swedish Academy announced the prize.
The triumph of Americans in this year's Nobel Prize. Six American scientists won the Nobel by showing absolute dominance in medical and physics. US was one of the three Nobel Laureates in this year in Chemistry Science. The Nobel Committee has once again chosen one US in the economy, but if no US name was ever heard in peace and literature in the meantime.
This economist has worked to overcome the gap between economics and psychology. In the Nobel Committee, he saw the economy from a much more human perspective.
Richard Thaller was already in the discussion working on the influence of psychology in making financial decisions. The book 'Naj', written by the University of Chicago economists, is widely regarded both in both intellectual and general readers. In the book, he used the term "najing" as a special regulatory component of the economy, whose lexical meaning is 'glue'. He originally wanted to show how ordinary people influence the pace of the economy through their behavior. According to him, it is possible to further advance the economy if it can affect the behavior of ordinary people. Many researchers were excited after this theory. The theory has so much influence over time that in 2010, British Prime Minister David Cameron established a nose unit, whose main goal was to find out the innovative techniques of changing the behavior of the people.
Per Stormberg, one of the judges of the Nobel Committee, said that Thaler's research brought about the impact of common man's behavior and mentality on the economy. The process of stimulating the general public for long-term planning on economic issues was the key to his research.
In a news release issued by the Nobel Committee, Thaler proposed the use of realistic hypotheses of mental and behavior in analyzing financial decisions. He presented a number of issues in this regard. These include restrictions on logic, social preference and lack of self-control. According to him, these issues affect the decision of the person and the effectiveness of the market.
Thanar's theory of 'mental account' was presented to explain the limitations of logic. According to him, in relation to economic decision making, people emphasize partial results of separate fields rather than overall results. In the same way, it is also possible to be more careful about human objects. In this case, due to lack of overall thinking, people are not particularly careful about any object, if not themselves. The intellectual limitations of the people have major impact on the financial market.
Thaler presents the 'fairness' issue for social preference. Through experiments and theories, he shows that awareness of the fairness of consumers during high demand creates a barrier to the price of commodity prices. But this consciousness and its effect does not work again during the ups and downs of the prices. His third regulatory 'deficiency of self-determination' is a very old matter, but in order to judge his influence in the market, he used the 'Planner-Duaar' method used in psychology. At the same time, he also highlighted the existing conflict between long-term plans and quick implementation. He shows that due to this dispute many stricter plans for old age were made but many failed to implement it. He used the word 'najj' in this case and it is the same as the prescription for self-determination. According to him, if the self-control of the common people in innovative methods is improved, it will play a very positive role in the whole economy from the person to the overall economy.
Most importantly, Thaler's research has encompassed economics and psychology. In the logical and regulatory way, while giving financial prescriptions, Thaler himself said that he will not accept it. According to the Nobel Prize, if he receives $ 9 million or $ 1.1 million as his value, he will spend it in the 'most unreasonable' way. Source: AFP and BBC
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