[00:00:00.000]American economist Richard Thaler has won the 2017 Nobel Prize for Economics. [00:00:09.189]Thaler was recognized for his work as a behavioral economist. [00:00:16.190]That means he studies the reasons behind the economic decisions people make. [00:00:23.690]Thaler received the prize partly for his research [00:00:29.979]into why people often make irrational financial decisions. [00:00:35.457]The Royal Swedish Academy of Sciences announced the $1.1 million prize on Monday. [00:00:45.737]Speaking of the prize money, Thaler told reporters in Chicago after the announcement, [00:00:54.058]“I will spend it as irrationally as possible.” [00:00:58.815]The award committee said Thaler explored “the consequences of limited rationality, [00:01:07.582]social preferences, and lack of self-control.” [00:01:13.559]It said the American economist’s work has shown how human qualities [00:01:21.207]affect people’s individual decisions and the movements of financial markets. [00:01:28.948]Thaler developed the theory of “mental accounting.” [00:01:34.963]It describes how people create separate accounts in their minds [00:01:40.689]to try to simplify financial decision-making. [00:01:46.227]He described how this can lead to less rational financial decisions [00:01:53.087]like saving for a vacation while paying high credit card interest. [00:02:00.367]His research, Bloomberg noted, [00:02:03.797]showed that people often choose short-term pleasures, [00:02:08.251]“which is why many people fail to plan and save for old age.” [00:02:15.716]The Reuters said Thaler’s research showed that such traits “as lack of self-control [00:02:24.881]and fear of losing what you already have” [00:02:28.982]can cause people to make bad short-term decisions. [00:02:34.228]One of those, Thaler noted, was keeping stock shares that have lost value [00:02:40.572]or selling them too soon when they have gained value. [00:02:46.073]Thaler helped develop the “nudge” theory. [00:02:50.859]It is the idea that small incentives can influence people to make good decisions. [00:02:59.319]He said people should be permitted to make their own choices, [00:03:05.067]but society “should actively try to guide individuals in the right direction.” [00:03:13.121]Cass Sunstein and Thaler wrote about the idea in the 2008 book “Nudge.” [00:03:23.562]The theory has been used by political candidates as they work to influence voters [00:03:32.172]and government officials seeking to make changes in society. [00:03:38.582]Other areas also interested Thaler. [00:03:43.219]He studied fairness. [00:03:45.677]He found that people can accept increasing prices [00:03:50.282]if the costs of many things are going up. [00:03:54.841]But he found that they strongly disapprove of companies that raise prices [00:04:01.774]simply because of high demand for one product. [00:04:06.772]Bloomberg called Thaler’s Nobel Prize [00:04:11.230]“a reward for 40 years of work spent studying human bias and temptation.” [00:04:20.598]Thaler is considered one of the first behavioral economists. [00:04:27.100]His field, once criticized, [00:04:30.452]has grown in popularity among economists over the last 10 years. [00:04:37.133]The economist even briefly appeared in the 2010 movie, “The Big Short,” [00:04:43.375]about the global financial crisis. [00:04:47.632]Thaler is a professor of behavioral science and economics [00:04:53.062]at the University of Chicago Booth School of Business. [00:04:58.530]The economics prize was created in 1968 in memory of Alfred Nobel after his death. [00:05:09.255]Since then, 79 individuals have received the prize. [00:05:15.756]The first woman winner was Elinor Ostrom in 2009. [00:05:22.757]American have received about half of the Nobel Prizes for economics. [00:05:30.516]I’m Mario Ritter. [00:05:33.087]The subtitles were produced by www.unsv.com, a popular website for learning English.{I}