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Oct 9, 2017
RIchard Thaler of The University of Chicago Booth School of Business has been awarded the Nobel Prize in Economics.
Thaler is known for his contributions to behavioral economics, one of my favorite subjects. Our job as advisors is part financial and part psychological . The balance of those parts, while different for everyone, affects everyone.
"Left-brainers" tend to think they are less swayed by emotion and more fact-based. However, mountains of research (much done by Thaler on mental accounting), tells us that all humans are emotional beings, especially about money. One of our critical roles (if not the most critical role) as advisors is to help clients make good decisions for themselves on large scales. Understanding where we fall short in decision-making is part of how we do this. Studying behavioral sciences helps us get there. Richard Thaler should be commended. Well done, Nobel committee.