Daniel Kahneman, Distinguished Fellow 2011

Daniel Kahneman is a Senior Scholar at the Woodrow Wilson School of Public and International Affairs. He is also 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 is a member of the National Academy of Science, the Philosophical Society, the American Academy of Arts and Sciences and a fellow of the American Psychological Association, the American Psychological Society, the Society of Experimental Psychologists, and the Econometric Society. He has been the recipient of many awards, including the Nobel Prize in Economic Sciences (2002), and the Lifetime Contribution Award of the American Psychological Association (2007).

Kahneman’s research career began with an interest in “attention”, a topic on which he wrote a well-known book. However, he came to international aclaim with his joint work with Amos Tversky in the 1970s on the topics of judgment and decision making. On judgment they showed that people use simple heuristics or rules of thumb to help make estimates, and that the use of these heuristics can lead to systematic biases. In other words, human errors are not random, they are predictable. This work was summarized in a landmark paper in Science, in 1974. Their next major breakthrough was Prospect Theory, published in Econometrica in 1979. Prospect theory elegantly shows that it is possible for a purely descriptive theory to be highly rigorous. This paper is among the most cited papers ever published in an economics journal, and was instrumental to the awarding of the Nobel Prize. It is also fair to say that this early work made the field of behavioral economics possible.

Over the past three decades Kahneman has continued to make contributions to economics, most notably in investigations of contingent valuation, fairness, the endowment effect, utility theory, and especially over the past decade, happiness. He has helped inspire a large-scale international investigation of what contributes to individual happiness. Although he is a psychologist by training, there can be no question that his significant contributions to economics make him highly worthy of this award.