Richard H. Thaler won the 2017 Nobel Prize in Economic Sciences on Monday for his work in integrating psychology and economics. File Photo by Carsten Rehder/EPA.
Oct. 9 (UPI) -- The 2017 Nobel Prize in Economic Sciences -- the final award for this year -- was awarded Monday to an American economist for his work in integrating economics and psychology.
Richard H. Thaler won the prize from the Royal Swedish Academy of Sciences.
"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," the Nobel announcement said.
Thaler developed the theory of mental accounting, which helps to explain how people simplify financial decision-making by creating separate accounts in their minds, His discovery showed why people tend to value the same item more highly when they own it than when they don't.
Thaler also did research on the concept of fairness by developing the dictator game with colleagues to study and measure the attitudes of fairness of different people around the world.
Thaler's research into the concept of self-control utilizing the planner-doer model is credited with shedding light on the internal tension between long-term planning and short-term doing.
"Succumbing to short-term temptation is an important reason why our plans to save for old age, or make healthier lifestyle choices, often fail," the Nobel announcement said.
"In his applied work, Thaler demonstrated how nudging -- a term he coined -- may help people exercise better self-control when saving for a pension, as well in other contexts."
Thaler earned a doctoral degree in 1974 at the University of Rochester in New York and is currently a Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics and the University of Chicago Booth School of Business in Illinois.
The Nobel Prize for Economics was the final award given out this year. The Peace Prize and others in physics, chemistry, literature and medicine were awarded last week.