Richard H. Thaler received a reputed acknowledgment of his lifetime work on Monday through Nobel Memorial Prize in Economic Sciences. He is a professor of behavioral science and economics at the University of Chicago Booth School of Business. Even though Thaler is one of the few minds that perceive the psychological influences in commerce, he is still not sure how to explain today’s steady stock markets at a global level.
Thaler Is the Nobel Prize Winner for Expanding the Field of Behavioral Finance
On Monday, the Royal Swedish Academy of Sciences awarded Richard H. Thaler for his achievements throughout his career. The commission justified its nominalization for the scientist’s ability to link the rigid world of economics to the fluidity of humans’ decision-making. His work created the foundation for the blooming field of behavioral finance.
Even though his lifetime work focused on one direction, Thaler still cannot explain the current events in economics. During an interview over the phone, the Nobel Prize winner didn’t refrain himself to admitting that his field of expertise can still surprise him.
“The unbelievably low volatility in a time of massive global uncertainty seems mysterious to me.”
The Economist Believes More Research Is to Be Done to Understand Today’s Steady Stock Markets
Therefore, Thaler is of the opinion that behavioral economics needs fresh minds to obtain clarity. More scientists should do their research on macroeconomics and the influence of individuals in this area. Therefore, at the moment Thaler cannot explain why steady stock markets are even possible in times of social and political discords.
One thing is for certain. Thaler’s innovative insights helped numerous areas to evolve. One of the target masses that benefited most are auto-enrolling workers.
Thaler has also managed to build his own business outside the world of academics based on his own research. The result is an $8 billion investment management company known as Fuller & Thaler Asset Management in California.
The organization applies financial theory to determine whenever an investor acted hastily due to external influences. For instance, investors can sell a stock for too low a price when they hear bad news.
Image source: 1