Psychologist Daniel Kahneman Wins 2002 Nobel Prize in Economics
2003, 11 (1):
The 2002 Nobel Prize in Economics was awarded to psychologist Daniel Kahneman. Based on the theory of “bounded rationality” and the principle of heuristics put forward by Herbert A. Simon, 1978 Nobel laureate in Economics, Daniel Kahneman maintained that there are three kinds of heuristics: representativeness, availability, and anchoring and adjustment. Contrary to predictions made by traditional economic theory,. Expected Utility Theory, Kahneman discovered that human decision making behaviors are often irrational and biased, and follow definite rules. Kahneman elaborated the Prospect Theory to explain judgment and decision making under uncertainty. He was awarded the Nobel Prize in economics "for having integrated insights from psychological research into economic science, especially concerning human judgment and decision making under uncertainty." The contributions of Daniel Kahneman to psychology and economics, with illustrative examples, are briefly described.
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