This year's Nobel for Economics went to Prof Dick Thaler for his fundamental thinking and research on behavioural economics. Many would like to know who this person is and what is so special about him. Sakal Media Group's Vikash Singh got the opportunity to actually study under Prof Thaler during his MBA course. A brief introduction by him about Thaler.
It is such a privilege to have been taught by Prof Dick Thaler during my MBA. Professor Thaler taught me behavioural economics at Chicago Booth and took classes of Managerial Decision Making in the summer of 2014. He is someone we would also go with our issues for immediate resolution. I remember our class timings were not too convenient and we casually brought this to his attention, and next day, its time was changed to our convenience.
He would always give credit to his TA for everything good saying Gandhi taught you this, Gandhi worked hard to teach you concepts easily, etc (Linnea Gandhi was his TA during that time). After reading his book Nudge, I distributed this to my team members in my previous firm and sent him an email how the book helped them make better decisions. He replied saying, ‘tell them Gandhi taught you all this’.
While Nudge helped us make our decisions without any bias, he also talked about ‘endowment effect’ fondly. It said that we value more to keep something we own than to obtain something we do not own. For example, if I have a mug and someone wants to give me a pen in exchange of this, I would generally be reluctant. He talked about how incentivising people would help them make rational decisions i.e. Nudge them to make decisions that make sense.
My another favourite was his introduction of how ‘biases’ limit us from making right decisions. Overconfidence and self confirmation bias were two factors that stood out for me where one is self-serving and justifies his/her actions without keeping others’ views in consideration. Overconfidence brings over precision and that leaves various critical components.
Prof Thaler takes concepts of behavioural economics to solve the issues of the society and enables improvements in public policy. I thought he made economics, more human.