Richard Thaler, a behavioral economist, won the Nobel Prize in economics this year. He co-authored the book, Nudge, in 2008. The theory behind “nudges” (a term he coined) changed the perspective of economics on the agents to be studied. Instead of picturing humans as rational preference satisfiers, Thaler suggests that we are susceptible to all sorts of irrational pressures and rarely do we decide to behave in ways that can be modeled on principles of rationality and our individual preferences. The “nudge” is one tool he uses in order to see one way in which we deviate from the rationalistic model of classical economics.
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