Kahneman, Daniel

Kahneman, Daniel

(born March 5, 1934, Tel Aviv, Israel) Israeli-born psychologist. He attended Hebrew University (B.A., 1954) in Jerusalem and the University of California, Berkeley (Ph.D., 1961). He later taught at such institutions as Princeton University and was on the editorial board of several academic journals. In the late 1960s he began conducting research to increase understanding of how people make economic decisions. His work with Amos Tversky on decision making under uncertainty resulted in the formulation of a new branch of economics, prospect theory. Using surveys and experiments, Kahneman showed that people were incapable of analyzing complex decision situations when the future consequences were uncertain. Instead, they relied on heuristic, or rule-of-thumb, shortcuts. In 2002 he shared the Nobel Prize for Economics with Vernon L. Smith.