Once considered an outlier, behavioral economics today has become part of generally accepted economic thinking, in large part thanks to Thaler's ideas. The prize in economic sciences was added by Sweden's central bank in 1968.
The Swedish Academy of Sciences said Thalers research has built a bridge between the economic and psychological analyses of individual decision-making.
The 72-year-old takes home a nine million kronor (944,000 euros, $1.1 million) prize sum.
While she says it's hard to overcome some of these tendencies outlined in Thaler's research, Madrian says "the key is to recognize your shortcomings and then try to set yourself up to limit their effects when you're not in a vulnerable situation".
Thaler, the University of Chicago professor who this week won the Nobel Prize in economics, expressed his views about President Donald Trump in the form of a simple, unflattering number.
The prize was awarded for understanding the psychology of economics, Swedish Academy of Sciences secretary Goeran Hansson said Monday. Thaler is one of the founding fathers of behavioural economics, a field that shows that people often make irrational decisions, that don't serve their best interests.
The Nobel committee said Thalers work shows how human traits affect individual decisions as well as market outcomes.
Since it was first awarded in 1969, Americans have dominated the economics prize, with 56 of the 79 laureates holding U.S. citizenship, including those who have dual nationalities.
Here's a good news for the Modi-led government by the The Royal Swedish Academy of Sciences: 2017 Economics Nobel prize victor Richard Thaler had praised the demonetisation of old Rs 500 and Rs 1000 notes announced by Indian PM Narendra Modi on November 8. Despite its provenance and carefully laborious name, it is broadly considered an equal to the other Nobel and the victor attends the famed presentation banquet.