modern · born 1945

Richard Thaler: The auditor of predictable error

Thaler kept a list of things people did that the standard model said they would not do. The list became a field, and it was assembled inside the university most identified with the model it undercut.

Facts reviewed 2026-09-09.

Richard Thaler is an American economist at the University of Chicago Booth School of Business. His early career was spent collecting anomalies: choices that were common, stable, and flatly inconsistent with the assumption that people optimize. Colleagues treated the list as noise. Thaler treated it as data.

Working with the psychology of Daniel Kahneman and Amos Tversky, he built the anomalies into models an economist could use, then into policy tools. Nudge, written with the legal scholar Cass Sunstein and published in 2008, moved the argument out of the seminar room.

Three findings do most of the work. People value what they already hold more than what they might acquire, so ownership itself changes willingness to trade. People keep mental accounts, treating money as non-fungible depending on where it came from. And people care about fairness in transactions in ways that constrain what a seller can profitably do, which is why raising the price of snow shovels after a storm can cost more in lost goodwill than it earns.