Richard Thaler is known as a theorist in the field of financial and economic behavior through his joint work with Nobel laureate economic psychologist Daniel Kahneman. He is the author of the so-called "nudge theory" ("managed choice"). He was one of the advisers to the 44th US President Barack Obama.

The Economics Prize is the "youngest" among the Nobel Prizes. What's more, it's technically not exactly a Nobel Prize, and some members of the Nobel family oppose its existence altogether. This award was established in memory of Alfred Nobel and in honor of its 300th anniversary by the Bank of Sweden (Sveriges Riksbank) in 1968. So its official name is the “Swedish State Bank Prize for economic sciences in memory of Alfred Nobel. Be that as it may, the website of the Nobel Foundation keeps track of the ceremony of awarding this prize. And those awarded the economic "Nobel" receive an appropriate diploma, a gold medal and a cash reward from the hands of the Swedish monarch at the annual ceremony held in Stockholm on December 10 on the anniversary of the death of Alfred Nobel.

In total, from 1969 to 2016, the award was made 48 times, and 78 people became laureates of the prize in economics. At the same time, in 18 cases the award was divided between two recipients, and in six cases the award was divided into three. The only female economics laureate is Elinor Ostrom (2009). There are also our compatriots among those awarded: in 1973, the creator of the theory of intersectoral analysis, Vasily Vasilyevich Leontiev, an American economist of Russian origin, a graduate of Leningrad University, became a laureate. And in 1975, the Soviet scientist Leonid Kantorovich received an award for "contribution to the theory of optimal resource allocation."

Last year, Oliver Hart and Bengt Holström received the award for their contributions to contract theory. And in 2015, the award was given to renowned microeconomist Angus Deaton “for his analysis of consumption, poverty and wealth.”

Most often, the award was given for research in the field of macroeconomics. As the American science journalist Maggie Coert-Baker once wrote, the typical Nobel Prize winner in economics is a 67-year-old man, born in the United States, who at the time of the award works at the University of Chicago. Indeed, the average age of Nobel economists is 67 years. At the same time, the youngest recipient was 51-year-old Kenneth J. Arrow in 1972, and the oldest was 90-year-old American economist Leonid Gurvich, born in Moscow (2007).

As usual, in anticipation of the announcement of the names of the winners, the media talked about possible favorites with a chance to become Nobel laureates-2017. So in the press, in this context, the Indian economist, professor of finance at the Booth School of Business (Graduate School of Business at the University of Chicago) Raghuram Rajan, who until 2016 was the chairman of the Reserve Bank of India, and in 2003-2007 - the chief economist of the International Monetary Fund, was named. Rajan is known as the author of Saving Capitalism from the Capitalists and Fault Lines, in which he, among other things, advocates the idea that capitalism as a system of free enterprise should be defended, not capitalists, and markets should be protected, not large owners.

The list of possible candidates included the name of 44-year-old American-French economist Esther Duflo of the Massachusetts Institute of Technology. In the past, by the way, she studied and taught in Moscow, worked as a research assistant to a French economist associated with the Bank of Russia and an American economic adviser, Jeffrey Sachs. Also mentioned was the name of Richard Posner of the University of Chicago, who is described as a leading thinker in the field of justice and economics, trying to analyze legal rules using economic instruments. Also mentioned was the name of William Nordhaus of Yale University, who studies climate change from an economic point of view.

Problem about Linda
Linda is an energetic woman of 30-35 years old. She can knock over a glass of moonshine without blinking an eye and make a toast no worse than a native Georgian. She is also infuriated by any manifestations of discrimination and excites demonstrations in defense of African rhinos.

Question. Which option is more likely:

1. Linda is a bank teller;
2. Linda is a bank teller and a feminist?

Decide for yourself which answer you choose and move on to the next problem.

Problem about an aircraft carrier
A large aircraft carrier with 600 sailors on board is sinking in the cold ocean. You received an SOS signal, but you can only go to their rescue on one of the two ships:

1. a fast cruiser with a capacity of 200 sailors. You are guaranteed to make it in time, but you will only save 200 people.
2. a slow battleship that can accommodate everyone, but there is a 50% chance that by the time the battleship arrives, the entire crew of the aircraft carrier will drown.

On which ship will you sail to rescue the sailors?

I hope you have already chosen the answers for the problems. In 2002 Nobel Prize in Economics first received a psychologist. His name was Daniel Kahneman(Daniel Kahneman). Something similar happened only 2 times before - in 1974 and 1994. Then the Nobel Prize in economics was awarded to mathematicians. What revolutionary could offer Kahneman?

Daniel Kahneman, was born in Israel, lives in the USA.

Kahneman came to the conclusion that human actions(and therefore economics and history) not so much the mind as human stupidity and that most human actions are irrational. The fact that people with ambition and foolishness was known at all times, but Kahneman experimentally proved that the illogical behavior of people is natural, and showed that its scale is too large. The Nobel Committee recognized that this psychological law is directly reflected in the economy.

Economists agreed that the highest award in economics was quite rightly awarded to a psychologist, having found the courage to admit that for several centuries they had been brainwashing each other and all of humanity, because they somewhat simplified and idealized our life, believing that people in their commodity-money relations act reasonable and prudent.

What ingenious experiments carried out by Kahneman? They are described in the books The Psychology of Forecasting (1973), Decision Making under Uncertainty (1974), Prospect Theory: An Analysis of Decision Making under Risk (1979), and Decision Making and the Psychology of Choice (1981).

We return to our problems, which were proposed to American students of the mathematical faculty. In the Linda problem, more 70% of students chose the 2nd option, because Linda's preliminary description fit their idea of ​​being a feminist, even though it was irrelevant and distracting. Correct answer- 1st. Mathematics students studying probability knew that the probability of a simple event occurring (Linda being a teller) is higher than the probability of a composite event occurring (Linda being a teller and Linda being a feminist). In other words, the total number of cashiers is greater than the number of feminist cashiers. They knew, but they took the bait.

Conclusion: human stereotypes easily overshadow a sober mind.

The aircraft carrier problem is even more interesting. 72% of students chose the option with a fast cruiser. When asked why they chose it, the students answered that if you sail on a cruiser, then 200 people are guaranteed to survive, and in the case of a slow battleship, perhaps everyone will die - I can’t risk all the sailors!

Another group of students formulated the question of the task differently. "You have two options to save the aforementioned sailors. If you choose a cruiser, then exactly 400 of them will die, and if you choose an armadillo, then again 50 to 50 (all or none)." With this wording 78% of students have already chosen a slow armadillo. When asked why they did this, the following answer was usually given: in the version with the cruiser, most of the people die, and the battleship has a good chance of saving everyone.

As you can see, the condition of the task has essentially not changed, just in the first case, the emphasis was placed on 200 surviving sailors, and in the second - on 400 dead, which is the same thing.

What is correct solution? In the case of an armadillo, the probability of saving 0.5 must be multiplied by 600 sailors, we get that an armadillo can save an average of 300 people. A fast cruiser will only save 200. 300 > 200 , therefore, if you put emotions aside, you need to save an aircraft carrier on an armadillo, so in this case, according to the theory of probability, more people can be saved.

Conclusions:
1) although people know a lot, but little ability to use knowledge in practice. Let me remind you that the tasks were given to students who were well acquainted with the theory of probability.
2) people are more impressed by losses than gains.

Here is another Kahneman observation.

A visitor entering a cafe is greeted by a waitress: " Oh, finally, the 1000th visitor came to us! You receive a prize - cup with blue rim ." The visitor accepts an unexpected gift with a forced smile, thinking where to attach the gift. A few minutes later, the waitress runs up to the visitor again and apologizes, they say, there was a mistake, and you are our 999th, and the 1000th is that disabled person who entered with a cane, after which he grabs a cup and runs away screaming: who do I see etc. Our visitor starts to worry: uh!, uh!, uh!!! Where are you going?! Here is the infection!- his irritation grows to the level of rabies, even though he needs a cup no more than an oar in the Sahara desert.

Conclusion: the degree of satisfaction from the acquisition is less than the degree of grief from adequate losses. People are ready to fight for their pocket penny and are less inclined to bend down for a ruble. (I am ready to subscribe to every word.)

Instead of an afterword.

When making decisions the choice of people is not always dictated by a sober mind, and often instincts, emotions, or what is commonly called intuition (conclusions on insufficient grounds). As a rule, when people make intuitive decisions in life on insufficient grounds, then if they guess, they remember them and take credit for themselves, and if they are wrong, they blame circumstances and forget. And then they say: I always rely on intuition, and it never fails me!

Although people can theoretically integrate and operate with cotangents on paper, in practice in life they tend to only add and subtract and usually do not go further than multiplication-division.

Former honors students at school often - twins in life. Professors and academicians know Bohr's postulates, Mendel's laws and the theory of quantum fields, but in fact they can be bankrupt in simple enterprises, complete laymen in the elementary psychology of communication and unhappy in marriage.

The irrationality of people is such that they are more willing to believe that they know the answers to any unknowable questions and refuse to admit the evidence that they can’t actually see beyond their own noses.

Oh, no wonder Kahneman was given the Nobel Prize. Reading how on January 2-3, Minsk residents swept several refrigerators from store shelves at once and fought for the last microwave oven, I was once again convinced that the mind is the last thing that moves people. When the first devaluation shock Belarusian ruble passed, people reached out to shops, unsuccessfully trying to hand over household appliances back, although in fact during the crisis it was necessary to buy cereals, flour, salt, matches, kerosene. The real crisis in Belarus has not even begun...

(The article was prepared based on the materials of the site www.orator.ru).

Daniel Kahneman received the Nobel Prize in Economics in 2002. Nothing special, just one fact - Daniel has been studying psychology all his life. In particular, he is one of two researchers who, in the early 70s, tried to destroy the fundamental paradigm of the economic sciences of that time: the myth of the man who makes archi-rational decisions, known as "Economic Man".

Unfortunately, Daniel's colleague, Amos Tversky, died in 1996 at the age of 59. Had Tversky lived, he would no doubt have shared the Nobel Prize with Kahneman, his longtime colleague and dear friend.

Human irrationality is the central point of all of Kahneman's work. In essence, his entire research path can be divided into three stages, at each of which the “irrational person” reveals himself from a new side.

At the first stage, Kahneman and Tversky conducted a series of ingenious experiments that revealed about twenty "cognitive biases" - unconscious reasoning errors that distort our judgments about the world. The most typical "": a tendency to depend on insignificant numbers. For example, in one experiment, experienced German judges showed a higher propensity to issue a long prison sentence for a shoplifter when a high number rolled on the dice.

In the second step, Kahneman and Tversky proved that people who make decisions under uncertainty do not behave in the way that economic models dictate; they do not "maximize utility". They later developed an alternative concept of process, closer to real human behavior, called "prospect theory". It was for this achievement that Kahneman received the Nobel Prize.

At the third stage of his career, after the death of Tversky, Kahneman delved into "hedonistic psychology": its nature and causes. The discoveries in this area were very extravagant - and not only because one of the key experiments included a colonoscopy (an unpleasant medical procedure during which an endoscopist examines and evaluates the condition of the inner surface of the large intestine using a special probe).

Think Slowly, Decide Fast book Thinking fast and slow) covers these three stages. This is an amazingly rich work: bright, deep, full of intellectual surprises and valuable for self-improvement. It's entertaining and touching in many ways, especially when Kahneman talks about his collaboration with Tversky ("The pleasure we got from working together made us extremely tolerant; it's much easier to strive for perfection when you're not bored for a minute") . So impressive is his vision of the failings of the human mind that New York Times columnist David Brooks recently declared that the work of Kahneman and Tversky "will be remembered hundreds of years from now" and that "it is an important foothold in man's self-knowledge of himself."

The leitmotif of the entire book is human self-confidence. All people, and especially experts, tend to exaggerate the significance of their understanding of the world - this is one of the key postulates of Kaleman. Despite all the misconceptions and illusions that he and Tversky (along with other researchers) have discovered over the past few decades, the author is in no hurry to assert the absolute irrationality of human perception and behavior.

“Most of the time we are healthy, and our actions and judgments are predominantly appropriate to the situation,” Kahneman writes in the introduction. However, a few pages later, he notes that the results of their work challenged the idea prevalent in academia that "people are generally rational." The researchers found "systematic errors in the thinking of normal people": errors that do not arise from excessive exposure to emotions, but are built into the established mechanisms of cognition.

Although Kahneman describes only modest political implications (for example, treaties should be written in clearer language), others (perhaps more self-confident scholars) have gone much further. Brooks, for example, argues that the works of Kahneman and Tversky illustrate the "limitations of social policy," in particular, the stupidity of the government's actions to combat unemployment and restore the economy.

Fast or logical

Such radical data is disapproved, even if it is not supported by the author. And disapproval breeds skepticism: called System 2 by Kaleman. In Kahneman's scheme, "System 2" is our slow, deliberate, analytical, and consciously purposeful way of thinking about the world. System 1, by contrast, is our fast, automatic, intuitive, and largely unconscious mode.

It is "System 1" that detects hostility in the voice and easily completes the phrase "Black and ...". And System 2 jumps right into action when we need to fill out a tax form or park a car in a narrow lot. Kahneman and others have found an easy way to explain how a person turns on System 2 during a task: just look into his eyes and notice how the pupils dilated.

In turn, "System 1" uses associations and metaphors to implement a quick and superficial view of reality, which "System 2" relies on to achieve clear beliefs and informed choices. "System 1" offers, "System 2" disposes. It turns out that "System 2" dominates? I guess, yes. But besides being selective and rational, she is also lazy. She tires quickly (the fashionable term for this is ego depletion).

Too often, instead of slowing down and analyzing things, System 2 settles for the light but unreliable vision that System 1 feeds it.

The skeptical reader may wonder how seriously all this talk about the First and Second Systems should be taken. Are they really a couple of little "agents" in our head, each with their own distinct personality? Not exactly, Kahneman says, but rather they are “useful fictions”—useful because they help explain the quirks of the human mind.

Linda is not in trouble

Consider Kahneman's "most famous and most controversial" experiment that he and Tversky did together: the "Linda problem." The participants in the experiment told of a fictional young woman named Linda, lonely, outspoken and very bright, who, as a student, was deeply concerned about issues of discrimination and social justice. Next, the participants in the experiment were asked - which option is more likely? The fact that Linda is a bank teller, or that she is a bank teller and an active participant in the feminist movement. The overwhelming majority of respondents named the second option as more likely. In other words, "feminist bank teller" was more likely than just "bank teller". This, of course, is a clear violation of the laws of probability, because every feminist teller is a bank employee; adding details can only reduce the likelihood. However, even among Stanford Business University graduate students taking advanced training in probability theory, 85% failed the Linda problem. One student noted that she made an elementary logical error, as "I thought you were just asking for my opinion."

What went wrong here? A simple question (how coherent is the narrative?) is replaced by a more complex one (how likely is this?). And this, according to Kahneman, is the source of many prejudices that infect our thinking. System 1 jumps to intuitive inference based on "heuristics"—an easy but imperfect way of answering questions. difficult questions— and System 2 approves of this one, without bothering with any extra work, if it looks logical.

Kahneman describes dozens of similar experiments demonstrating failures in rationality - "basic institutional neglect", "availability cascades", "illusion of certainty", etc.

Are we really that hopeless? Think again about Linda's problem. Even the great evolutionary biologist Stephen Jay Gould was concerned about this. During the experiment described above, he knew the correct answer, but wrote that “the monkey in my head keeps jumping up and down, screaming: “She can’t just be a bank teller; read the description!”.

Kahneman is convinced that it was Gould's System 1 that gave him the wrong answer. But perhaps something less subtle is going on. Our everyday conversation takes place against a rich backdrop of unstated expectations—what linguists call “implicature.” Such implicatures can seep into psychological experiments. Given the expectations that facilitate communication, it might be reasonable for the participants in the experiment who chose the option "Linda is a bank clerk" to imply that she was not a feminist. If so, then their answers cannot be considered truly erroneous.

"Indestructible" optimism

In more natural conditions - when we discover the fact of fraud; when we talk about things instead of symbols; when we evaluate dry numbers rather than fractions, people are more likely not to make similar mistakes. At least, this is what most of the further research suggests. Perhaps we are not so irrational after all.

Some cognitive biases, of course, look gross even in the most natural settings. For example, what Kahneman calls "bad planning": a tendency to overestimate the benefits and underestimate the costs. So in 2002, when remodeling kitchens, Americans expected the work to cost an average of $18,658, but ended up paying $38,769.

Misplanning is "only one manifestation of the total optimistic bias" which "may well be the most significant of the cognitive biases." It turns out, in a certain sense, the bias towards optimism is obviously bad, because. it breeds false beliefs, such as the belief that everything is under your control, and not just a lucky coincidence. But without this "illusion of control" would we be able to get out of bed every morning?

Optimists are psychologically more resilient, have strong immune systems, and live longer on average than their realist peers. In addition, as Kahneman notes, exaggerated optimism serves as a defense against the paralyzing effect of another bias: "fear of loss": we tend to fear losses more than we value gains.

Remembering happiness

Even if we could get rid of prejudices and illusions, it is by no means a fact that this would make our life better. And here the fundamental question arises: what is the point of rationality? Our day-to-day reasoning abilities have evolved to deal effectively with complex and dynamic environments. Thus, they are more likely to be flexible to this environment, even if they are turned off in a few artificial experiments by psychologists.

Kahneman never entered into philosophical duels with the nature of rationality. He did, however, come up with an exciting suggestion as to what her goal might be: happiness. What does it mean to be happy? When Kahneman first raised this issue in the mid-1990s, most research on happiness relied on asking people how satisfied they were with their lives in general. But such hindsight estimates depend on memory, which is a highly unreliable variable. What if, instead, we sampled pleasant and painful experiences on a case-by-case basis and summarized them over time?

Kahneman calls this "experiencing" well-being, as opposed to the "remembering" well-being that researchers rely on. And he found that these two measures of happiness diverge in unexpected directions. The "Experiencing Self" does not do the same as the "Remembering Self". In particular, the Remembering Self does not care about duration—how long a pleasant or unpleasant experience lasts. Rather, it retrospectively evaluates the experience in terms of the maximum level of pain or pleasure.

In one of Kahneman's most horrifying experiments, two quirks of the Remembering Self were shown, the "continued neglect" and the "last impression rule." Two groups of patients had to undergo a painful colonoscopy. Patients in group A underwent the usual procedure. Group B patients also underwent this procedure, except for a few added minutes of discomfort during which the colonoscope was immobile. Which group suffered the most? Group B experienced all the pain experienced by group A, and much more. But since the extension of the colonoscopy in Group B was less painful than the main procedure, patients in this group were less worried, and they had little objection to the second colonoscopy.

As with colonoscopy, so with life. Not the "testing", but the "remembering I" gives instructions. The remembering self exercises "tyranny" over the experiencing self. "Strange as it may seem," writes Kahneman, "I am both the remembering self and the experiencing self, making my life unfamiliar to me."

Kahneman's radical conclusion is not so far-sighted. The 'Experiencing Self' may not exist at all. For example, brain-scanning experiments by Rafael Malach and colleagues at the Weizmann Institute in Israel have shown that when objects are absorbed into an experience, such as watching the movie The Good, the Bad, the Ugly, parts of the brain associated with self-awareness are closed ( inhibited) by the rest of the brain. The personality just seems to disappear. Then who is enjoying the movie? And why should such impersonal pleasures be the responsibility of the "remembering self"?

Obviously, there is still much to be discovered in hedonistic psychology. But Kahneman's conceptual innovations provided the basis for many of the empirical studies outlined in his work: that headaches are hedonically worse in the poor; that women who live alone earn, on average, the same as women who have a life partner; So what family income$75,000 in expensive regions and countries is enough to maximize your enjoyment of life.

For Daniel Kahneman, one of the most exciting moments in today's global economic crisis was Alan Greenspan, the former chairman of the US Federal Reserve, admitting before a congressional committee that he believed too strongly in the ability of free markets to self-correct.

“Essentially, he said that the foundations on which he built his activities were wrong, and these words from the mouth of Greenspan make a deep impression,” says Kahneman, who received the 2002 Nobel Prize in Economics for his pioneering work on inclusion certain aspects psychological research into economics.

But more significant for Kahneman was that Greenspan in his speech considered as rational subjects not only individuals but also financial institutions. “It seemed to me an ignorance not only of psychology, but also of economics. He seems to believe in the magical power of the market to ensure self-discipline and good results.”

Kahneman carefully emphasizes that, as a psychologist, he is an outsider in the realm of economics. However, he contributed to laying the foundation for new area research called behavioral economics, which challenges standard rational choice economics and introduces more realistic assumptions about human judgment and decision making.

Standard economic models It is assumed that people rationally seek to maximize their benefits and minimize their costs. And behavioral economists challenge some of the traditional tenets by showing that people often make decisions based on hunches, emotions, intuition, and rules of thumb rather than cost-benefit analysis; that the markets are infected with the disease of herd behavior and groupthink; that individual choice can often be influenced by how solutions are formulated.

Overconfidence is the driving force behind capitalism
A global economic crisis rooted in individual acceptance and financial institutions decisions to invest in subprime mortgages has brought behavioral economics and the question of how people make decisions into the spotlight. “People who took subprime mortgages were completely deluded,” Kahneman says in an interview. F& D » in his home, located in the picturesque hills of Berkeley overlooking San Francisco. “One of the main ideas of behavioral economics, borrowed from psychology, is the widespread overconfidence. People do things they absolutely shouldn't do because they believe they can succeed." Kahneman calls this "illusory optimism."

Illusory optimism, he says, is one of the driving forces of capitalism. Many are unaware of the risks they are taking,” Kahneman says. This idea was also voiced in Nassim Taleb's book "The Black Swan", which indicates that people do not take into account in sufficient possible consequences rare but large-scale crushing events that make our assumptions about the future wrong.

He states: “Entrepreneurs are people who take risks and, in most cases, do not know it themselves. This happens in the case of mergers and acquisitions, but also at the level of small entrepreneurs. In the US, a third of small businesses fail within the first five years, but if you poll these people, each one of them individually thinks they have an 80 to 100 percent chance of success. They just don't know."

Two sides or more
Kahneman was born in Tel Aviv in 1934 and grew up in Paris as a child and then in Palestine. He is not sure whether his vocation as a psychologist is due to an early exposure to interesting gossip or, conversely, his interest in gossip was evidence of an awakening vocation.

“Like many other Jews, I suppose I grew up in a world made entirely of people and words, and most of the words were about people. Nature was practically non-existent, and I never learned to recognize flowers or understand animals, he writes in his autobiography. But the people my mother liked to talk about with her friends and with my father were amazing in their complexity. Some of them were better than others, but the very best were far from perfect, and none were just bad. Most of her stories were told with irony, and they all had two sides, if not more."

At a fairly early age, in Nazi-occupied Paris, he had an episode that left an indelible impression in view of the many different meanings and conclusions that could be drawn regarding human nature. “It was probably the end of 1941 or the beginning of 1942. Jews were required to wear the Star of David and obey the 6pm curfew. I went to play with a Christian friend and stayed up late. I turned my brown sweater inside out so I could walk a few blocks to my house. I was walking along an empty street and saw a German soldier approaching. He wore a black uniform, which I was told to be more afraid of than uniforms of other colors, and was worn by soldiers of the special forces of the SS. I approached him, trying to walk quickly, and noticed that he was staring at me. He called me, picked me up and hugged me. I was afraid that he would notice the star on my sweater. However, he spoke to me very emotionally in German. When he put me back on the ground, he opened his wallet, showed me a photo of the boy, and gave me some money. I went home more than ever convinced that my mother was right: people are infinitely complex and interesting.”

In 1946, his family moved to Palestine, and at the Hebrew University of Jerusalem, Kahneman received his first degree in psychology, with an additional specialization in mathematics. In 1954, he was drafted into the Israeli army and after a year as a platoon leader, he was given the task of evaluating the soldiers of combat units and their leadership abilities. At that time, Kahneman developed a revolutionary system of interviews to assign recruits to suitable positions, and this system, with only minor changes, is used to this day.

He graduated from the University of California at Berkeley in 1961 and was a lecturer at the Hebrew University from 1961 to 1978, spending his sabbaticals abroad, notably at Harvard and Cambridge. It was while working in Jerusalem that a collaboration began that would eventually lead to a Nobel Prize in a field that Kahneman had not studied, economics.

New line of research
Kahneman, currently Professor Emeritus of Psychology and Public Affairs at Princeton University's Woodrow Wilson School, received the Nobel Prize in 2002 for his work with fellow psychologist Amos Tversky. The two scientists collaborated for more than a decade, but Tversky died in 1996, and the prize is not awarded posthumously. “Amos and I were lucky to have together the goose that laid the golden eggs, a shared mind that was better than either of our minds individually,” Kahneman said of their joint work.

In presenting the award, the Nobel Committee noted that Kahneman incorporated the findings of psychology into economics, thereby laying the foundation for a new line of research. The award was given to Kahneman jointly with Vernon Smith, who created the foundations for a separate field of experimental economics.

Kahneman's main discoveries concern decision making under uncertainty. He demonstrated how human decisions can systematically fall short of the predictions of standard economic theory. Together with Tversky, he formulated "prospect theory" as an alternative that better explains the observed behavior. Kahneman also discovered that human judgments can be based on intuitive breakthroughs that systematically deviate from the basic principles of probability. "His work has inspired a new generation of researchers in economics and finance to enrich economic theory by taking advantage of cognitive psychology's insights into deep human motivation," the Nobel committee said in a statement.

Prospect theory helps to explain experimental evidence that people often make different decisions in situations that are essentially identical but presented in different ways. The article by these two authors became the second most cited article published in the prestigious scientific economic journal Econometrica in the period 1979-2000 ( Kahneman and Tversky , 1979). This research has influenced a wide variety of disciplines, including marketing, finance, and consumer choice theory.

Kahneman says that one should not look for special meaning in the name of the theory. “When we were ready to submit the work for publication, we deliberately chose the meaningless name for our theory “prospect theory”. We assumed that if the theory ever gained publicity, an unusual name would do the trick. It was probably the smart decision."

Kahneman and Tversky's collaborative research explores why a person's response to loss is significantly stronger than the response to gain, and this has led to the concept of loss aversion, which is one of the main areas of research in behavioral economics.

The two psychologists also found empirically that people assign less weight in their decision making to outcomes that are only probable than outcomes that are certain. This tendency leads to risk avoidance in cases of almost certain gains and to risk taking in cases of almost certain losses. This can explain the behavior of a player who loses many times in a row and yet refuses to accept his apparent losses and continues to play in the hope of getting his money back.

“People are willing to bet on getting back what they’ve lost,” Kahneman said in a radio interview at Berkeley in 2007. This made him worried that the leaders of the state, who brought the country to the brink of defeat in the war, were more likely to take additional risks than to stop hostilities.

The co-authors also found that people show inconsistent preferences when the same option is presented to them in different forms. This helps to explain non-rational economic behavior, such as people traveling to a distant store to take advantage of a discount on a cheap item but not doing the same to get a discount on an expensive item.

Creation of a new discipline
The way in which prospect theory has found its application to economics appears to be almost a coincidence associated with publication. Kahneman and Tversky decided to publish an article in the magazine Econometrica, not in PsychologicalReview , because the first published their earlier work on decision making, which brought their research to the attention of economists.

Kahneman says his collaboration with longtime research partner and friend Richard Thaler, a professor of economics and behavioral science at the University of Chicago, contributed to the development of behavioral economics. “Although I do not deny my credit, I must say that, in my opinion, the work of integration was actually done mainly by Thaler and a group of young economists who began to quickly form around him, starting with Colin Camerer and George Lowenstein, to whom then Matthew Rabin, David Leibson, Terry Odean and Sendhil Maleinathan joined."

Kahneman says that he and Tversky offered "quite a number of initial ideas that subsequently entered the theoretical developments of some economists, and prospect theory certainly gave some legitimacy to reliance on psychology as a source of realistic assumptions regarding economic entities". Thaler, who was a regular contributor to the "Anomalies" column in the magazine JournalofEconomicPerspectives between 1987 and 1990, and periodically wrote in this column and subsequently, says that it is thanks to the joint work of Kahneman and Tversky that today we have a thriving direction of behavioral economics. “Their work became the conceptual framework that made our field of science possible.”

The push created by the crisis
The buzz created by the Nobel Prize, coupled with introspection by those sobered by the global economic crisis economists created a strong impetus for the spread of behavioral economics. So strong that it began to infiltrate today's White House through books such as The Push to Make the Right Choice. Nudge "") (Thaler and Sunstein) and "Predictably irrational" (" Predictably Irrational ”) by Duke University professor Dan Ariely.

The Push for Good Choices explores how people make choices and how they can be nudged to the best choice for themselves on a range of issues, such as buying healthy food or deciding to put more money into savings. "It's clear that this is a good time for behavioral economics," Kahneman says with a smile.

Not everyone agrees that behavioral economics is the future, seeing it as a passing and annoying fad. “Of course, today everyone is obsessed with behavioral economics. The casual reader might get the impression that the rational homoeconomicus died a sad death, and economists went ahead and recognized the true irrationality of the irrationality of mankind. Nothing could be further from the truth,” says David Levin of Washington University in St. Louis.

“Behavioral economists are right to point out the limitations of human cognition,” says Richard Posner of the University of Chicago Law School. But if they have the same cognitive limitations as consumers, should they develop consumer protection systems?”

“Perhaps the biggest challenge facing behavioral economics is to demonstrate its applicability in the real world,” write Steven Levitt and John List in an article published in the journal Science (2008). In almost all cases, laboratory studies reveal strong empirical evidence for behavioral abnormalities. However, there are many reasons to suspect that these laboratory results may not be of such a general nature as to be true for real markets.”

Place in the economy
Although behavioral economics has now become an established discipline taught at leading universities, “it remains a discipline that builds on the shortcomings of standard economics,” says Wolfgang Pesendorfer, professor of economics at Princeton University.

However, its full integration into economics proves difficult, although Wall Street and investment analysts take into account the cognitive and emotional factors that affect the decision-making process of people, groups and organizations. “There are too many theories of behavior, and most of them have too narrow application,” writes Drew Fudenberg of Harvard University in his article.

In the eyes of some, even perspective theory remains flawed in the absence of a generally accepted model for how points of reference are set. “The fundamental difference between psychologists and economists is that psychologists are interested in individual behavior, while economists are interested in explaining the results of the interaction of groups of people,” says David Levin in a lecture given at the European University Institute entitled “Is Behavioral Economics Doomed?”.

Growth of trust
However, the shocks caused by the collapse of the subprime mortgage market and the subsequent global crisis have led to increased confidence in the need for more human factors in regulation and economic policy. Kahneman Suggests whole line conclusions from the current crisis.

Need for greater consumer and individual investor protection. “There has always been a question about the need and the extent to which people are required to be protected from their own choices,” he says. But I think it’s become very, very difficult now to say that people don’t need protection.”

The shortcomings of market mechanisms have much broader implications. “Interestingly enough, it turns out that when misinformed individuals lose their money, it leads to the collapse of the global economy. Accordingly, the irrational actions of individuals have much broader implications in the context of rationally malevolent actors in financial system and extremely weak regulation and oversight.”

♦ Limited forecasting capabilities. "Extremely high variability in stock markets and in the financial system indicates the level of uncertainty in the system and limited forecasting capabilities.”

Greenspan appears to agree that there are flaws in the models used to predict and assess risk. In an article published in financial times Last March, Greenspan compared human nature to a lost piece of the puzzle that makes it impossible to explain why the spreading subprime mortgage crisis was not identified sooner by risk management or econometric forecasting models.

“These models do not fully take into account what, in my opinion, has so far been only a marginal factor for business cycle and financial models, the natural human reaction that leads to sharp alternations of euphoria and fright, repeated from generation to generation with little or no there were no signs of accumulation of knowledge, writes Greenspan. Asset Price Bubbles Are Rising And Popping Today, Just Like They Have Ever Did From The Beginning XVIII century, when modern competitive markets emerged. Of course, we tend to call such a behavioral response irrational. However, for forecasting, what should be important is not whether a human reaction is rational or irrational, but only its observability and systematicity. "In my opinion, this is an important missing 'explanatory variable' in both risk management and macroeconometric models."

Reflections on thinking
In addition to the Nobel Prize in Economics, Kahneman was recognized as one of the largest scientists in the field of psychology. "Kahneman, his colleagues and students have changed the way we think about how people think," said Sharon Stephens, president of the American Psychological Association, when Kahneman received the highest award in the field in 2007 "for a lifetime of outstanding contributions to psychology." Kahneman continues to closely monitor the development of behavioral economics, but he himself has long been occupied with other issues. Today, his focus has shifted to the study of well-being, and he is collaborating with Gallup to conduct a worldwide survey to quantify global issues and opinions in more than 150 countries.

Challenge to the clergy
In the past, Kahneman compared the economics community to a clergy that is difficult for heretics to enter. But he acknowledges how far economics has progressed over the past three decades in incorporating the results of psychological research and elements of other social sciences. We have published our article in the journal Econometrica in 1979, that is 30 years ago. In 2002, I was received with honors in Stockholm. So it's not a very strict church, given that for the first few years the economists ignored us for the most part. Yes, I was talking about the church, but this is not a church where you will be burned at the stake for heresy, otherwise we would have missed so many!”

That the Nobel Prize in Economics (or, officially, the Swedish national bank in economic sciences in memory of Alfred Nobel) will receive the American economist Richard Thaler: "for his contribution to behavioral economics." Read about the use of knowledge and methods of modern cognitive science in economic research, as well as what behavioral economists study in our material.

The Nobel Prize in Economics was established in 1969, and since then it has been awarded mainly either for fundamental economic discoveries or for research on the application of applied mathematics to economics. For example, in 1979 Theodor Schultz and Arthur Lewis received an award for their work on economic development(For example developing countries), and in 1994 the famous American mathematician John Nash and his colleagues became laureates, who carried out an analysis of equilibrium in the theory of non-cooperative games.

Thus, the activities of the majority of economics laureates (and economic science in general) are aimed at building formal micro- and macroeconomic models necessary for effectively describing and predicting the financial behavior of people and large government and commercial structures. In its most general form, economics assumes that human behavior can be predicted. That is why economics is called "the most accurate social science."

Economists, however, understand that people do not always behave rationally and distribute their income in accordance with the first, most important needs. We can spend money on goods that we do not need, just because we like them, or not spend money on something that is expected to be profitable and useful, just because we are afraid. However, such factors affecting consumer sentiment are difficult to take into account when analyzing financial behavior: analysts can predict an increase in the demand for umbrellas in the rainy season (and, accordingly, an increase in supply - to maximize profits), but they will be confused if it turns out that in the sales ranking umbrellas for some reason gave way to raincoats. That is why the behavioral factors that influence people's financial decisions have been ignored for a long time - despite the fact that the term "behavioral economics" appeared in the 70s of the last century.

Everything changed when, in 2002, the Nobel Prize in Economics was awarded not to an economist, but to an American psychologist of Israeli origin, Daniel Kahneman, with the wording: "For the application of psychological methods in economics." Kahneman has long been engaged in the study of decision making - a cognitive process, which consists in choosing one strategy of behavior among several possible ones, as well as the analysis of external and internal (behavioral) factors that influence this choice.

This year's Nobel Prize has traditionally been awarded to an economist: University of Chicago professor Richard H. Thaler. His contribution to economics, however, is more on the psychological side of things. His main thesis scientific works comes down to the fact that a person can be forced to buy, and his financial behavior can be predicted, given that a person is an irrational being.

One of the most famous works of Thaler, which significantly enriched behavioral economics, is devoted to the study of the so-called "ownership effect". According to classical economic theory, the possession of any good or service should not affect its value. In other words, the theory assumes that a person who has bought, for example, a book, will sell it, if he wants to part with it, at the same price for which he got it. Thaler (together with Kahneman) showed that this was not the case. In 1990, scientists conducted an experiment in which they distributed ordinary coffee mugs to people, and then offered to sell them or exchange them for ballpoint pens. It turned out that a person who already owns a mug is ready to part with it for twice the "price" that he was ready to pay for the same mug, while he did not yet possess it.

Thinking about the factors under the influence of which a person makes such a decision, scientists came to the conclusion that it is due to his own behavior: already possessing a product, a person assigns more value to it (and even becomes attached to it), since he has already spent his energy, time and funds to purchase it.

Another example of the "irrationality" of people's financial behavior, which Thaler describes in his works, is associated with the concept of "honesty" of the price. So, in a bar and a supermarket, the same product can be sold, but at different prices. And although we are willing to pay as much for a bottle of beer as the bartender asks, we will not buy the same beer at the same price in the supermarket, because we are sure that it should cost half as much there.

Despite the fact that Thaler considers people to be irrational beings, he has no doubt that their financial behavior can be predicted - and even benefit from it. In his book Nudge. Choice architecture. How to Improve Our Decisions about Health, Wealth, and Happiness”, released in 2008 (released in 2017), he formulates the theory of “nudge” (from the English. nudge - push with your shoulder). According to this theory, some aspects of human behavior can be predicted - and then used to effectively sell goods and services, as well as to maximize profits.

Therefore, Thaler believes, commercial organizations in vain they try to convince the buyer that the purchase of their goods is beneficial for him. It would be better if they convinced him that he needed their goods.

Expert opinion

Most economic theories proceeds from the simplified characteristics of the environment. They imply that decisions are made rationally, depending on future returns. But it is clear that in life this is almost always not the case.

It is known that a person has several dozen prejudices by which he is guided, including in economic activity. On the one hand, a person can proceed from the rational behavior of other people and, accordingly, behave differently, or, on the contrary, expect people to behave irrationally in order to behave rationally himself. This applies to all areas: both investing and trading.

This is the so-called "behavioral finance". This area has been popular for fifteen years, it is quite expected that one of the Nobel Prizes will be devoted to just this - that is, the problem of using psychological models to predict the economic behavior of people.

These works are backed up by good mathematics, they have found their confirmation in econometric works. As an example of the influence of prejudices, irrationality, one can cite, for example, the situation with ICO, the situation around the blockchain - this is a typical example of the use of "behavioral finance". This is a distraction from problems, which makes it possible for those who were the first to earn money, since it is obvious that a correction in the cryptocurrency market is inevitable.

The second example: the fact that in our country in the first decade of the 2000s there was a completely abnormal situation with real estate. The same situation was in 1927-1930 in the United States, and this led to a crisis in the entire economy. Real estate in all respects cannot bring a decent investment income, but in our case it brought it. Several factors were at work here: the influence of mortgages, a sharp lack of investment opportunities. That is, as a result it shot, someone earned.

Analyzing the irrational actions of people allows you to avoid stepping on a rake that you want to step on, but having a theory does not mean that you personally will achieve success. Any economic regularities are implemented statistically.

Ivan Rodionov
Doctor of Economics, Professor of the Higher School of Economics

Thaler could have become a Nobel laureate 15 years ago - together with Kahneman, whose co-author he often acted as. Then, however, the Royal Swedish Academy of Sciences considered that the prestigious prize in economics should not be awarded to two psychologists at once (despite the fact that Thaler is an economist), and together with Kahneman, Vernon Smith, one of the founders of experimental economics, received the prize. Now the academy has recognized the contribution of the second "founding father" of behavioral economics to the development of economic science.

Professor Thaler "killed" Homo economicus - a fabulous stage in human evolution, reaching which he behaves as rationally as possible - and thus allows corporations and governments to predict their financial behavior. Instead, Thaler showed that every consumer is, first of all, a person who is guided not by abstract profit, but by his own (sometimes spontaneous and leading to immediate reward) interests.

The award ceremony of the Royal Swedish Academy of Sciences will be held in Stockholm in early December: this year the winner of the prize in economic sciences will receive nine million Swedish kronor (approximately $1.1 million). When asked by a journalist from The New York Times about how he would spend the money, Thaler replied: "The least rational."

Elizabeth Ivtushok

Literature

Leonard T. C. Richard H. Thaler, Cass R. Sunstein, Nudge: Improving decisions about health, wealth, and happiness // Constitutional Political Economy. - 2008. - T. 19. - No. 4. - S. 356-360.

Kahneman D., Knetsch J. L., Thaler R. H. Experimental tests of the endowment effect and the Coase theorem //Journal of political Economy. - 1990. - T. 98. - No. 6. - S. 1325-1348.

Kahneman D., Knetsch J. L., Thaler R. Fairness as a constraint on profit seeking: Entitlements in the market //The American economic review. - 1986. - S. 728-741.