user: What are the most notable contributions that the University of Chicago has made in the field of economics? Who are the most interesting current faculty in the economics department?

assistant: The University of Chicago has a rich history in economics, with many notable contributions over the years. It is traditionally associated with the Chicago School of Economics, founded by Milton Friedman and George Stigler in the 1940s.  The school believed that the market was the most efficient and effective mechanism for allocating resources, and that government intervention often led to unintended consequences and inefficiencies. One of the key ideas associated with the Chicago School is the concept of rational choice theory, which holds that individuals make choices based on their own self-interest and that these choices are rational and based on all available information. Human capital theory, the efficient market hypothesis and rational expectations theory were also largely contributions of University of Chicago economists. Notable contributions to econometrics include James Heckman's work on policy evaluation and his corrections for sample selection bias. 

There are currently many distinguished economists working at the University. Here is a short list of just some of those currently working there:
- Steven Levitt, best known for his popular book Freakonomics, whose work focuses on crime, corruption and the economics of information.
- John List, whose main contributions are large field experiments that test economic theories and hypotheses.
- Richard Thaler, winner of the Nobel Memorial Prize in Economic Sciences for his work in behavioural economics.

user: Thank you for the detailed answer! I'm particularly interested in learning more about Richard Thaler's work in behavioral economics. Can you tell me more about what his contributions have been in that field?

assistant: Richard Thaler is a prominent figure in the field of behavioral economics, which examines how psychological, social, and emotional factors influence economic decision-making. Thaler's work has had a significant impact on the way economists and policymakers think about human behavior and decision-making.

One of Thaler's most significant contributions to behavioral economics is his concept of "mental accounting." This theory suggests that people often mentally categorize their money and other resources into different accounts, such as "savings," "entertainment," or "groceries." These mental accounts can lead to irrational behavior, such as overspending on entertainment or underinvesting in savings.

Another important contribution of Thaler's is his research on the "endowment effect." This theory suggests that people place a higher value on objects they own than on identical objects that they do not own. This effect can lead to market inefficiencies, such as sellers demanding higher prices for their goods than buyers are willing to pay.

Thaler is also well-known for his work on "nudging," or using small changes in the environment or presentation of information to influence behavior. He has argued that policymakers can use nudges to encourage people to make better decisions, such as choosing healthier food or saving more for retirement.

Thaler was awarded the Nobel Memorial Prize in Economic Sciences in 2017 for his work in behavioral economics. His research has had a significant impact on the field, and his ideas are widely studied and applied in both academia and policy.