Leavey Prof Looks Back At Role Helping Nobel Prize Winner Richard Thaler

first_imgLeavey Prof Looks Back At Role, Helping Nobel Prize Winner Richard Thaler Last Updated Nov 8, 2017 by Jonathan PfefferFacebookTwitterLinkedinemail RelatedChicago Booth Professor Richard Thaler Takes Home Nobel Prize in EconomicsA professor from the University of Chicago Booth School of Business has won top honors in the field of economics. According to a press release, Richard Thaler was awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2017. Thaler was honored for investigating the implications of…October 10, 2017In “Featured Home”Booth Professor Wins John Bates Clark MedalUniversity of Chicago Booth School of Business professor Matthew Gentzkow has been awarded the 2014 John Bates Clark Medal by The American Economic Association. The annual prize is awarded to an American economist under the age of 40 who has made significant contributions to economics over the course of a single calendar year. Named after the American economist…April 21, 2014In “Featured Home”NYU Stern and Yale SOM Professors Awarded Nobel Prize in EconomicsFaculty define a business school. Their research, teaching, mentorship, and influence have tremendous impact on the experience students have while there and often the careers they pursue once they graduate. From the curriculum they shape to the initiatives and centers they help run, faculty are vital. And it certainly never…October 16, 2018In “Featured Home” regions: San Franciscocenter_img In the wake of famed economist Richard Thaler recently winning the Nobel Prize, the SCU Leavey School of Business looked deeper into SCU’s historical role in the development of the behavioral economics field.Leavey Finance professor Hersh Shefrin and Thaler’s pioneering 15-year collaboration grew out of a mutual dissatisfaction with how neoclassical economics trivialized psychology’s role in financial behavior. In the 1970s, the duo formalized “the concept of temptation” into seminal research that modeled the ways in which “humans quite often behaved differently from the norms assumed by traditional economic models.”In a paper entitled “An Economic Theory of Self-Control,” Shefrin and Thaler articulated their highly influential “planner-doer” model, in which the “planner,” the part of the brain that desires action can find itself in “simultaneous internal conflict” with the “doer,” the part of the brain that actually takes action.Another important study Shefrin and Thaler undertook was a 1986 investigation into whether the source of money—“A Paycheck vs. A Home or Investment vs. A Windfall Inheritance”—changed the way SCU MBA students perceived it. Shefrin explains, “Our Santa Clara students were the first to provide evidence in a systematic way that said it really matters in what form you get your wealth.” Their research revealed that students were much more willing to spend wealth from paychecks and inclined to save wealth from inheritance, for instance. Last but not least, Shefrin’s collaboration with SCU Glenn Klimek professor of finance Meir Statman “launched the literature in behavioral finance,” providing the “first empirical evidence of the ‘disposition effect,’ in which are loath to unload losing stocks.” Their paper “Ethics, Fairness and Efficiency in Financial Markets” explored “how people save and invest, factoring in the impact of psychological phenomena.”Statman reflects on the tangible impacts of his distinguished career. “The fact that [my collaborations] … led to a system for helping people save more, is a source of pride for me.” About the AuthorJonathan PfefferJonathan Pfeffer joined the Clear Admit and MetroMBA teams in 2015 after spending several years as an arts/culture writer, editor, and radio producer. In addition to his role as contributing writer at MetroMBA and contributing editor at Clear Admit, he is co-founder and lead producer of the Clear Admit MBA Admissions Podcast. He holds a BA in Film/Video, Ethnomusicology, and Media Studies from Oberlin College.View more posts by Jonathan Pfeffer last_img read more