The Nobel Prize in economics goes to Richard Thaler for highlighting humanity’s flaws

The 2017 Nobel prize in economics was awarded to Richard H. Thaler, an American economist at the University of Chicago, for his contributions to behavioral economics.

Thaler won the award, worth 9 million Swedish krona ($1.1 million), for enhancing the “understanding of the psychology of economics,” the prize committee said. They described Thaler as a pioneer in the study of how and why people don’t always make rational economic decisions. His work explores “the consequences of limited rationality, social preferences, and lack of self-control,” which reveal how humans’ flaws “systematically affect individual decisions as well as market outcomes.”

Thaler was born in 1945 in New Jersey. Speaking after receiving the award, he said that one of the most important aspects of his work is to stress that economic agents are human, and economic models must take that into account.

The University of Chicago describes his research as examining into the implications of what happens when the standard economic assumption that everyone in is rational and selfish is relaxed. In 2008, he co-authored the influential book Nudge: Improving Decisions about Health, Wealth and Happiness with Cass Sunstein, explaining how behavioral economics can inform better public policy decisions.

The Sveriges Riksbank Prize in Economic Sciences is awarded in memory of Alfred Nobel. This year is the 49th time the prize has been awarded. It has only once been to given to a woman, Elinor Ostrom, who died in 2012. Last year, the prize was awarded to Oliver Hart of Harvard University and Bengt Holmström of the Massachusetts Institute of Technology, for explaining how contracts work and why we make them the way we do.

Read next: Quartz’s coverage of the 2017 Nobel Prizes

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