economist Matthew Rabin wins MacArthur "genius" fellowship
for work on human behavior
Rabin, a University of California, Berkeley, professor of economics
whose work integrates psychological research with formal economic
models, is one of 25 recipients nationwide of a prestigious
MacArthur Foundation "genius" fellowship.
will receive a $500,000 cash award over the next five years
with no restrictions on how the money may be used. The John
D. and Catherine T. MacArthur Foundation will announce the new
fellows on Tuesday night, June 13.
Fellows are chosen for their exceptional creativity, record
of significant accomplishment and potential for still greater
achievement," said fellows program director Daniel Socolow
in a foundation news release. "This new group of fellows
is a wonderful collection of extraordinary minds in motion."
This is the
fourth consecutive year that a member of the UC Berkeley community
has received a MacArthur Foundation Fellowship. Rabin's award
brings to 27 the number of individuals from UC Berkeley who
have been honored with MacArthur fellowships since the program
began in 1981.
Also on this
year's list of winners is Susan Sygall, a UC Berkeley alumna
who is now executive director of Mobility International USA,
an organization with a global reach that helps secure rights
and opportunities for disabled individuals, especially women.
She received her BA from UC Berkeley in 1976.
human behavior such as procrastination, addiction and playing
fair can affect the choices people make and produce subsequent
economic outcomes, Rabin works on explaining the effect mathematically.
Although the MacArthur Foundation describes him as a pioneer
in behavioral economics, Rabin doesn't think he is.
what I do 'second-wave behavioral economics,'" he said.
"The pioneers were psychologists who came along 15 years
ago and convinced economists that some of their assumptions
were wrong. Now, people like me are working to carefully adjust
the models and formalize the effect."
done more than anyone to bring insights from psychology into
mainstream economic analysis," said Maurice Obstfeld, chair
of UC Berkeley's economics department. "He has shown economists
the way toward a rigorous yet more realistic analysis of human
his work helps explain "addiction, dieting, procrastination,
everything that makes us human but would never be predicted
by economic models."
most in need of revamping, Rabin said, include ways consumers
handle credit card debt and stock market behavior in which investors
infer too much from to little information.
investor can do well two months in a row just by luck, and people
will think he's a genius," Rabin said. "Then, they
may pay a lot for his advice and it may not be worth anything."
on smoking patterns and addiction suggests that cigarette taxes
would have to be a lot higher to discourage use. He also has
worked extensively on procrastination and how it adversely affects
saving rates and retirement outcomes.
doesn't take much of a self-control problem and a desire for
immediate gratification to really hurt yourself economically,"
Ted O'Donoghue, an assistant professor at Cornell University
working in the same field, said such work is very important
to the future of economics.
is very useful for starting to think about the ways people might
make errors in how they care for themselves," Donoghue
said. "Economic models say people don't make errors; psychological
theories say, 'Yes, they do.'"
is working on a book that will be an economist's guide to psychology.
As of yet,
Rabin has no idea what he will do with the MacArthur money,
which he was surprised to receive. MacArthur fellows typically
don't know they are being considered for the prize until they
are told in a congratulatory phone call.
I got the call, I think I said, 'Thank you,'" Rabin said,
laughing. "I don't know the proper etiquette when someone
gives you a half-million dollars."
wins for work to model irrational behavior
Foundation web site: http://www.macfdn.org
Matthew Rabin bio page: http://www.macfdn.org/programs/fel/2000fellows/rabin.htm
Matthew Rabin's home page: http://elsa.berkeley.edu/~rabin/