This summer, I took a look at my retirement account. It was pathetic.

Scattered across a random group of mutual funds – growth, value, tech, emerging markets, what have you – my retirement dollars were all making skimpy profits, even though the market was good. The stockpickers running those funds had one job – to do better than the S&P 500 – and they were clearly failing.

I moved my entire retirement nest egg into an index fund, which essentially just imitates the S&P 500 with no stockpicking or other funny stuff. The result: my little nest egg ballooned by thousands of dollars in just a few months.

I forgot to thank one man for my move: Eugene Fama. The man who won the Nobel memorial award in economics Monday discovered years ago that stockpicking was a fool's game; you can't really beat the market. An entire industry of index funds exists because of Fama's research.

His two co-winners are also men who care what happens in the real world. Economics has a reputation as wonky, nerdy discipline that loves theories that are pure and distant from humanity, like cottony clouds, and hates to get its hands dirty with real-world concerns. This year's Nobel prize in economics is finally, a victory for the study of human nature.

The three winners this year – Eugene Fama, Robert Shiller and Peter Lars Hansen – study stock and bond markets and the abnormal psychology of bubbles, and why we fail to pick stocks. They are interested in numbers, yes, but mostly, they are interested in how real people behave under financial stress. Fama said Monday:

Finance drew me in because it's so fundamental to human activity. It follows precise mathematical relations but there's an element of imprecision that reflects human nature.

One winner, Robert Shiller, created an influential housing index. He is known for spotting bubbles early. The other winner, Lars Peter Hansen, found new ways of thinking about stocks and risk. And Fama showed that investors can't really beat the market in the short term; when you invest in an S&P 500 index fund, you're making use of his work, just as I did. A colleague at the University of Chicago said during the ceremony that Fama had had "a phenomenal impact on the practical world and people's lives."

Fama, Hansen and Shiller have often disagreed about the specifics of how the real world works. Fama has said he doesn't believe in bubbles; Shiller, who wrote the book Irrational Exuberance, spots them. But what unites them is that these are three men who aren't looking for the perfect world. They're happy to figure out a world in which orderly spreadsheets of numbers are overwhelmed by the venal, panicky, chaotic tendencies of humanity in a crisis.

This is the kind of economics we need more of: the kind that speaks to us. With the financial crisis and recession, economics are part of our daily lives. The unemployment rate, housing sales, mortgage lending rates … we all live with these numbers weekly, in our communities and in our wallets. Those numbers are part of the study of economics. They also describe the world we live in.

A lot of economics, however, depends on unreliable numbers. It's not about the cold, hard truth. When we talk about the unemployment rate, for instance, we're not really talking about how many people are unemployed in the country. It's an educated guess, based on a survey of companies and a survey of people. It's also often wrong the first time, and needs to be revised multiple times before it's right. The same goes for a range of other economic data, like GDP.

That's why it was so important that the Nobel committee praised Shiller, Fama and Hansen for their empirical work. Empirical means they are trying to get a numerical sense of the real world. They are working on ways to measure our economic behavior more accurately, and to help us understand ourselves better in the process.

The very premise of most economic theory is that we all exist in a perfect world where people make rational choices, a world of neat levers and switches. It's orderly, but it's not exactly accurate. This year's three winners show us that economics does not exist in a perfect world, a soundproof chamber, but instead, in the irrational, unpredictable scrum of humanity.