July 2003

RICHARD H. THALER

Office Address Home Address of Business 2130 Lincoln Park West University of Chicago Chicago IL 60614 1101 E. 58th St. 773-929-3346 Chicago IL 60637 773-702-5208 Fax: 773-834-0013 Email: [email protected]

Personal Data

Born: September 12, 1945 East Orange, New Jersey

Education

Ph.D. University of Rochester, 1974 M.A. University of Rochester, 1970 B.A. Case Western Reserve University, 1967 Dissertation Title: "The Value of Saving A Life: A Market Estimate" (Supervisor: Sherwin Rosen)

Current Positions (since July 1995)

Robert P. Gwinn of Behavioral Science and , and Director of the Center for Decision Research, Graduate School of Business, University of Chicago.

Research Associate, National Bureau of Economic Research (co-director -with Robert Shiller- of the Project, funded by the Russell Sage Foundation)

Honors

Member, American Academy of Arts and Sciences Doctor of Humane Letters, (honorary) Case Western Reserve University, 2003

Prior Employment History

January 1998-June 1998 Fellow, Center for Advanced Study in the Behavioral Sciences, Stanford California

January 1988-June 1995 Henrietta Johnson Louis Professor of Economics, Johnson Graduate School of Management, Cornell University and RICHARD H. THALER Page 2

Director, Center for Behavioral Economics and Decision Research

Septeber 1994-June 1995 Visiting Professor, Sloan School of Management, MIT

January 1993-July 1993 Visiting Scholar, Sloan School of Management, MIT

September 1991-July 1992 Visiting Scholar, Russell Sage Foundation, New York, NY

July 1986 - January 1988 Professor of Economics, Johnson Graduate School of Management.

August 1984 - 1985 Visiting Associate Professor, Policy Division, Faculty of Commerce and Business Administration, The University of British Columbia.

July 1980 - July 1986 Associate Professor, Johnson Graduate School of Management, Cornell University.

September 1978 - June 1980 Assistant Professor of Economics and Public Administration, Graduate School of Business and Public Administration, Cornell University.

June 1977 - August 1978: Visiting Scholar, National Bureau of Economic Research - West, Stanford, California.

Summer 1975: Research , Public Research Institute, Center for Naval Analyses, Arlington, Virginia.

September 1974 - June 1978 Assistant Professor, Graduate School of Management, University of Rochester.

July 1972 - June 1975: Program Associate, Rochester-Monroe County Criminal Justice Pilot City Program, University of Rochester.

September 1971 - June 1974 Instructor, Graduate School of Management, University of Rochester.

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Administrative Assignments

1995-present Director, Center for Decision Research, University of Chicago

1992-present Co-director (with Robert Shiller) of NBER project on Behavioral Economics

1989 - 1995 Director, Center for Behavioral Economics and Decision Research, Cornell.

1981 - 1983: Associate Director of Cornell's Center for the Study of American Political Economy.

1980 - 1981: Chairman, Policy Committee (Dean's Faculty Advisory Committee).

1975 - 1977: Chairman of Ph.D. Committee (Director of Doctoral Program), Graduate School of Management, University of Rochester.

1974 - 1977: Co-ordinator of MBA Program for non-profit sector, Graduate School of Management, University of Rochester.

Research Grants

1993- 1995 National Science Foundation, Economics and DRMS, "Myopic Loss Aversion"

1992-present Russell Sage Foundation grant to NBER to fund a series of meetings on topics in behavior economics. Joint with Robert Shiller

1985 - 1992 "Continued Research in Psychology and Economics," Alfred P. Sloan Foundation and Russell Sage Foundation.

1984 - 1985: "Research in Psychology and Economics," (Sabbatic leave funding) Alfred P. Sloan Foundation.

1983- 1984 "Descriptive Choice Models," U.S. Department of the Navy.

1976 - 1977: Principal Investigator for grant from ASPER, Department of Labor, "An Equalizing Difference Model of Employment."

Other Professional Activities

Associate Editor: Journal of Accounting, Auditing, and Finance; Journal of Business, Journal of Behavioral Decision Making; Journal of Risk and Uncertainty; Quarterly Journal of Economics.

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National Association Assignments: American Economics Association: Member of Nominating Committee, 1983. National Research Council: Ten Year Outlook on Opportunities in the Behavioral Sciences, member of the working group on information and decision making. National Academy of Science: Member of a committee (chaired by Herbert Simon) to prepare a report to the President's science advisor on research opportunities in decision making and problem solving. Publications

Books:

Quasi-Rational Economics, Russell Sage Foundation, 1991.

The Winner's Curse: Paradoxes and Anomalies of Economic Life, Free Press, 1991 (Princeton University Press paperback, 1993).

Advances in Behavioral Finance, editor. Russell Sage Foundation, 1993.

Published Papers

"The Value of Saving A Life: Evidence From The Labor Market," (with Sherwin Rosen) in Nester Terleckyj, ed. Household Production and Consumption, National Bureau of Economic Research, 1975.

"Design Requirements for Criminal Justice Research and Resource Management/Planning Systems," (with Jeffrey Lasky) in Proceedings of the Second International Symposium of Criminal Justice Information and Statistics Systems, 1976.

"On Optimal Speed Limits," in Henry Manne and Roger Miller, eds. Auto Safety Regulation: The Cure or the Problem? 1976.

"Some Results of Research on the Value of Saving Lives," (with Sherwin Rosen) in Proceedings of a Workshop on the Measure of Intangible Environmental Impacts, Electric Power Institute, 1977.

"An Econometric Analysis of Property Crime: Interaction Between Police and Criminals," Journal of Public Economics, 1977.

"A Note on the Value of Crime Control: Evidence from the Property Market," Journal of Urban Economics, 1978.

"Sticky Wages and Implicit Contracts: A Transactional Approach," (with David Mayers) Economic Inquiry, October 1979.

"Discounting with Fiscal Constraints: Why Discounting is Always Right," Defense Management Journal, October 1979.

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"Toward A Positive Theory of Consumer Choice," Journal of Economic Behavior and Organization, 1980, reprinted in Breit and Hochman, eds. Readings in , 3rd edition, 1985, and in Howard Kunreuther, ed. Risk: A Seminar Series, IIASA, 1981.

"Interpreting a Rationality in Hierarchical Games," (with H.M. Shefrin), Economic Letters, 1980.

"Judgment and Decision Making Under Uncertainty: What Can Learn from Psychology," Risk Analysis in Agriculture: Research and Educational Developments, Proceedings of a seminar sponsored by the Western Regional Research Project W-149, Tucson, Arizona, June 1980.

"An Economic Theory of Self-Control," (with H.M. Shefrin) Journal of Political Economy, April 1981.

"Maximization and Self-Control," a commentary on "Maximization Theory in Behavioral Psychology," by Rachlin, Battalio, Kagel and Green, in The Behavioral and Brain Sciences, 1981.

"Some Empirical Evidence on Dynamic Inconsistency," Economic Letters, 1981.

"Public Policy Toward Life Saving: Should Consumer Preferences Rule?" (with William Gould), Journal of Policy Analysis and Management, 1982.

"Precommitment and the Value of a Life," in Michael Jones-Lee, ed. The Value of Life and Safety, North-Holland Press, 1982.

"Transaction Utility Theory," Proceedings of the Association for Consumer Research Conference, San Francisco, 1983.

"Illusions, Mirages, and Public Policy," Public Interest, Fall 1983, reprinted in Hal Arkes and Kenneth Hammond, eds. Judgment and Decision Making: An Interdisciplinary Reader, Cambridge University Press, 1986, and in V.T. Covello et al., eds. Environmental Impact, Assessment, Technology Assessment and Risk Analysis, NATO ASI Series, 1983.

"An Economic Analysis of Multiyear Procurement," (with Kathy Utgoff) in Gerald R. McNichols, ed. Operations Research in Cost Analysis, Operations Research Society of America, 1984.

"Mental Accounting and Consumer Choice," Marketing Science, 1985.

"Does the Stock Market Overreact?" (with Werner F. M. De Bondt), Journal of Finance, 1985.

"The Relevance of Quasi Rationality in Competitive Markets," (with Thomas Russell), , 1985.

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"Fairness and the Assumptions of Economics," (with and Jack Knetsch), Journal of Business, 1986.

"The Psychology and Economics Conference Handbook," (commentary on papers by H. Simon, H. Einhorn and R. Hogarth, and A. Tversky and D. Kahneman), Journal of Business, 1986.

"Fairness as a Constraint on Profit-Seeking: Entitlements in the Market," (with Daniel Kahneman and Jack Knetsch), American Economic Review, 1986.

"Further Evidence on Investor Overreaction and Stock Market Seasonality," (with Werner F. M. DeBondt), Journal of Finance, 1987.

"The Psychology of Choice and the Assumptions of Economics," in Alvin Roth, ed. Laboratory Experiments in Economics: Six Points of View, Cambridge University Press, 1987.

"The Behavioral Life-Cycle Hypothesis" (with H. M. Shefrin) Economic Inquiry, 1988.

"Gambling with the House Money and Trying to Break Even: The Effects of Prior Outcomes in Risky Choice" (with Eric Johnson), Management Science, June 1990.

"Do Security Analysts Overreact?" (with ) American Economic Review, May 1990

"Experimental Tests of the Endowment Effect and the Coase Theorem" (with Daniel Kahneman and Jack Knetsch) Journal of Political Economy, December 1990. Reprinted in: Recent Developments in , John Hey and , ed. 1992.

"Investor Sentiment and the Closed-end Fund Puzzle," with Charles Lee and Andrei Shleifer. Journal of Finance, March 1991.

"Economic Analysis and the Psychology of Utility: Applications to Compensation Policy" (with Daniel Kahneman) American Economic Review, 81, May 1991, 341-346.

"Window Dressing by Pension Fund Managers," (with Josef Lakonishok, Andrei Shleifer, and Robert Vishny) American Economic Review, 81, May 1991, 227-231.

"How to Get Real People to Save," in Marvin Kosters, ed. Personal Savings, Consumption, and Tax Policy, American Enterprise Institute: Washington D.C., 1992.

"Saving and Mental Accounting," in and Jon Elster, Choices over Time, Russell Sage Foundation, 1992.

"Yes, Discounts on Closed-End Funds Are a Sentiment Index," and "Summing Up," (replies to Chen, Kan and Miller) (with N. Chopra, C. Lee, and A. Shleifer) Journal of Finance, June 1993.

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"Psychology and Savings Policies" American Economic Review, May 1994.

"College and University Endowment Funds,: Why Not 100% Equities," (with J. Peter Williamson) Journal of Portfolio Management, Fall 1994.

"Financial Decision Making in Markets and Firms," (with Werner F. M. De Bondt) in R. Jarrow, V Maksimovic, and W. T. Ziemba (eds.) Finance, Series of Handbooks in Operations Research and Management Science, Elsevier-North Holland, 1995.

"Myopic Loss Aversion and the Equity Premium Puzzle," (with Shlomo Benartzi) Quarterly Journal of Economics February, 1995

"Price Reactions to Dividend Initiations and Omissions: Overreaction or Drift? (with Roni Michaely and Kent Womack) Journal of Finance June, 1995.

"How to Evaluate Savings Programs: Discussion of Papke, Peterson and Poterba" in Papers in the Economics of Aging edited by David A. Wise (Chicago: University of Chicago Press) 1995.

"Doing Economics without Homo Economicus" in Exploring the Foundations of Research in Economics: How Should Economists Do Economics? edited by Steven G. Medema and Warren J. Samuels. 1996

“Irving Fisher: Modern Behavioral Economist”, American Economic Review, May 1997.

“The Effect of Myopia and Loss Aversion on Risk Taking: An Experimental Test” (with , Daniel Kahneman, and Alan Schwartz), Quarterly Journal of Economics, May 1997.

“Labor Supply of New York City Cab Drivers: One Day at a Time,” (with , Linda Babcock, and George Loewenstein), Quarterly Journal of Economics, May 1997.

“Do Changes in Dividends Signal the Future or the Past? (with Shlomo Benartzi and Roni Michaely), Journal of Finance, July 1997.

“Probabilistic Insurance” (with Peter Wakker and Amos Tversky) Journal of Risk and Uncertainty, 1997.

“Caveat Compounder: A Warning about Using the CRSP Equally Weighted Index to Compute Long-Run Excess Returns” (with Linda Canina, Roni Michaely, and Kent Womack) Journal of Finance, 1998.

“A Behavioral Appoach to Law and Economics,” (with Christine Jolls and Cass Sunstein) Stanford Law Review, May 1998.

“Theories and Tropes: A Reply to Posner and Kelman,” (with Christine Jolls and Cass Sunstein) Stanford Law Review, May 1998.

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“Giving Markets a Human Dimension,” in The Complete Finance Companion, 1998 (reprinted from the Financial Times).

“Risk Aversion or Myopia? Choices in Repeated Gambles and Retirement Investments” (with Shlomo Benartzi), Management Science March, 1999

“Mental Accounting Matters” Journal of Behavioral Decision Making, 1999.

“The End of Behavioral Finance” Financial Analysts Journal, November 1999.

“From Homo Economicus to Homo Sapiens” Journal of Economics Perspectives, Winter 2000.

“Naïve Diversification in Defined Contribution Savings Plans” (with Shlomo Benartzi), American Economics Review, 2001

“The Endowment Effect and Repeated Market Trials: Is the Vickrey Auction Demand Revealing?” (with Jack Knetsch and Fang-Fang Tang) Experimental Economics, 2002

“How Much is Investor Autonomy Worth?” (with Shlomo Benartzi), Journal of Finance 2002.

“Can the Stock Market Add and Subtract? Mispricing in Tech Stock Carve-outs” (with Owen Lamont) 2003, Journal of Political Economy

“Libertarian Paternalism” with (Cass R. Sunstein) American Economic Review, 2003

“Libertarian Paternalism is not an Oxymoron” (with Cass R. Sunstein) University of Chicago Law Review, 2003, forthcoming

“In Honor of : Winner of the John Bates Clark Medal (with Colin Camerer) Journal of Economics Perspectives, 2003, 17, 159-176.

“A Survey of Behavioral Finance” (with Nicholas Barberis) in George M. Constantinides, Milton Harris, and Rene M. Stulz, Handbook of the Economics of Finance 2003, Elsevier North Holland, 1053-1123

“Save More Tomorrow: Using Behavioral Economics in Increase Employee Savings” (with Shlomo Benartzi), Journal of Political Economy 2004

Design Choices in Privatized Social Security Systems: Learning from the Swedish Experience (with Henrik Conqvist) forthcoming, American Economics Review.

"Anomalies" Articles Published in the Journal of Economic Perspectives

First Series:

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1. "Seasonal Movements in Security Prices I: The January Effect," (Summer 1987).

2. "Seasonal Movements in Security Prices II: Weekends, Holidays, Turn of the Month and Intra-day Effects," (Fall 1987).

3. "The Winners Curse," (Winter 1988).

4. "Parimutual Betting Markets: Racetracks and Lotteries," with William Ziemba (Spring 1988).

5. "Cooperation," with Robyn Dawes (Summer 1988).

6. "The Ultimatum Game," (Fall 1988).

7. "A Mean Reverting Walk Down Wall Street," with Werner De Bondt (Winter 1989).

8. "Interindustry Wage Differentials," (Spring 1989).

9. "Intertemporal Choice," with George Loewenstein (Fall 1989).

10. "Saving, Fungibility, and Mental Accounts," (Winter 1990).

11. "Preference Reversals," with Amos Tversky (Spring 1990).

12. "Foreign Exchange," (with Ken Froot) (Summer 1990).

13. "Closed End Mutual Funds," (with Charles Lee and Andrei Shleifer) (Fall 1990).

14. "The Endowment Effect, Loss Aversion, and Status Quo Bias," (with Daniel Kahneman and Jack Knetsch) Winter 1991).

Second Series:

1. "More Dictator and Ultimatum Games" (with Colin Camerer) Summer 1995

2. "The Flypaper Effect" (with James Hines) Winter 1995

3. “The Equity Premium Puzzle” (with Jeremy Siegel) Winter 1997.

4. “Risk Aversion” (with Matthew Rabin), Winter 2001

5. “The Law of One Price” (with Own Lamont) 2003