"What we typically do in our standard models is to assume that individuals are rational. Why do we assume that? Well, because there is one way to be rational and a thousand ways of being irrational. Thaler's contribution is to systematize the deviations from rationality," said Peter Fredriksson, professor of economics at Uppsala University, and member of the Nobel committee at the Royal Academy of Sciences.
In its motivation, the committee mentions, in particular, three different aspects that the laureate Richard Thaler has explored, which describe how people may not be as rational as other economic models describe. Fredriksson explained these three aspects to Radio Sweden. They have to do with "mental accounting", consumers' sense of fairness, and the lure of temptation.
What would Richard Thaler himself be spending the SEK 9 million of prize money on?
"I will try to spend it as irrationally as possible," he said, when he was called up on a crackling phone line during the press conference at the Royal Academy of Sciences.