If irrational human behavior can be predicted, then it can be incited, or nudged. Thaler coined the term “nudging” to describe cheap and easy interventions that change people's decision-making. The term can apply to both weighty and trivial causes, from encouraging savings by auto-enrolling employees in retirement plans to putting a housefly sticker in a men's urinal to "improve aim.”

Like any academic concept that breaks into the mainstream, nudging has its doubters. Libertarians say nudges can be tricky and infantalizing. Liberals have claimed they sometimes sacrifice effectiveness for cleverness. (For example, if a government wants to increase saving, it might be more efficient to force savings through a program like Social Security than to rely on companies to nudge their employees toward 401(k) plans.) To his credit, Thaler has acknowledged that nudging is a weapon that can used both for good and bad.

In 2013, Robert Shiller won the Nobel in Economics for his work showing that markets are not rational and that their short-term gyrations are often driven by "animal spirits" that are more emotional than logical. Thaler did more than perhaps any other economists to devise a vocabulary for these animal spirits. While he is famous for exploding the myth of rational decision-making, the irony is that insisting that human beings are not rational is by far the more rational approach to studying their behavior.

When The New York Times asked how he would spend the prize money, Thaler said: “This is quite a funny question. I will try to spend it as irrationally as possible.”