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Thaler, the CUBA fund and the efficient markets hypothesis (plus a roundup)

Dick Thaler has won The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for 2017.Granting the award to a behavioural economist has an inherent advantage for anyone tasked with explaining the economist’s work: experiments highlighting human imperfections, inconsistencies and irrationalities are great fun to talk about. Journalists still baffled by how to explain the work of 2014 winner Jean Tirole can especially appreciate this.But while some will point to Thaler’s famous “nudges” such as the fly in the urinal, my own favourite example of Thaler’s ability to explain behavioural quirks is somewhat different. It resides in the ostensibly dreary realm of closed-end mutual funds.Thaler presented this example at the 2016 American Economic Association annual meetings, but

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Dick Thaler has

Cardiff Garcia
Cardiff writes mostly about US macroeconomic issues, with daily excursions into other topics about which he claim no expertise. Before Alphaville, Cardiff spent a little more than two years as a reporter at Dow Jones Financial News covering investment banking, asset management, and private equity. Along the way he has written freelance pieces on a variety of other topics from behavioural psychology to Muay Thai, the latter also being a personal interest that involves frequently getting kicked in the shins (and torso, and head).

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