Stockholm: The Nobel economics prize has been awarded to Richard Thaler of the University of Chicago for his contributions to behavioral economics.

The prize was awarded for “understanding the psychology of economics,” Swedish Academy of Sciences secretary Goeran Hansson said Monday.

The Nobel committee said Thaler’s work shows how human traits affect individual decisions as well as market outcomes.

Thaler “is a pioneer in behavioral economics, a research field in which insights from psychological research are applied to economic decision making,” a background paper from the academy said. That “incorporates more realistic analysis of how people think and behave when making economic decisions,” it said.