Summary of “Behavioral economics: The flaws that Nobel Prize winner Richard Thaler wants you to know about yourself”

Awarded the Nobel prize in economics to Richard Thaler.
An American economist at the University of Chicago, for his pioneering work in behavioral economics, which examines humanity’s flaws-namely, why we don’t make rational economic decisions.
People can make bad economic choices based on something Thaler dubbed the “Endowment effect,” which is the theory that people value things more highly when they own them.
By the Economic & Social Research Council found that 51 countries had developed centralized policy units influenced by behavioral sciences.
In the UK, a national scheme to automatically enroll people in a personal savings plan had an opt-out rate of just 12%. These flaws-or human traits, to be more charitable-may not seem unusual, but Thaler argues that appreciating the implications of human behavior has lost its importance in dominant economic theory.
Thaler wrote: “It is time stop thinking about behavioral economics as some kind of revolution. Rather, behavioral economics should be considered simply a return to the kind of open-minded, intuitively motivated discipline that was invented by Adam Smith and augmented by increasingly powerful statistical tools and datasets.”
Today, behavioral economics is still considered a somewhat separate subject within the broader discipline.
If Thaler has it his way, the field of study that just won him a Nobel prize won’t exist for long: “If economics does develop along these lines the term ‘behavioral economics’ will eventually disappear from our lexicon. All economics will be as. behavioral as the topic requires.”

The orginal article.