Daniel Kahneman was awarded the Nobel Prize in Economic Sciences in 2002 for his pioneering work integrating insights from psychological research into economic science, particularly in the areas of judgment and decision-making.
Much of his work was carried out in collaboration with his long-time colleague, cognitive psychologist Amos Tversky. This work paved the way for a discipline known as behavioral economics, the study of how people make economic decisions, drawing on insights from psychology.
“The concept of loss aversion was, I believe, our most useful contribution to the study of decision making,” Kahneman said of his research in an interview with NobelPrize.org. “The asymmetry between gains and losses solves quite a few puzzles, including the widely noted and economically irrational distinction that people draw between opportunity costs and 'real' losses. Loss aversion also helps explain why real-estate markets dry up for long periods when prices are down, and it contributes to the explanation of a widespread bias favoring the status quo in decision making.”
“The concept of loss aversion was, I believe, our most useful contribution to the study of decision making.
In addition to the Nobel Prize, Kahneman is the recipient of the Distinguished Scientific Contribution Award of the American Psychological Association (1982) and the Grawemeyer Prize (2002), both jointly with Tversky. In addition, he is the recipient of the Warren Medal of the Society of Experimental Psychologists (1995), the Hilgard Award for Career Contributions to General Psychology (1995), and the Lifetime Contribution Award of the American Psychological Association (2007).
Kahneman is currently a professor of psychology and public affairs emeritus at the Woodrow Wilson School, the Eugene Higgins professor of psychology emeritus at Princeton University, and a fellow of the Center for Rationality at the Hebrew University in Jerusalem. He’s a founding partner of the TGG Group, a Chicago-based consulting firm that leverages behavioral economics and data analysis to help businesses increase productivity, reduce costs, and drive growth.
Kahneman is also the author of Thinking, Fast and Slow, selected as a bestseller by The New York Times and 2012 winner of the National Academy of Sciences Best Book Award. In the book, he describes the interplay between the two halves of the brain—one, fast and emotional, the other, slower and logical.