prompter: 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.
prompter: 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: Certainly! Richard Thaler is one of the most prominent figures in the field of behavioral economics, which combines insights from psychology with traditional economic theory to better understand how people make decisions. Thaler's work has been particularly influential in challenging the traditional assumption of rationality in economic models and has helped to reshape the way economists think about individual decision-making.

Thaler's contributions to the field of behavioral economics are wide-ranging, but some of his most notable work includes:

1. The Endowment Effect: Thaler was one of the first economists to study the endowment effect, which is the tendency of people to value things they already own more highly than equivalent things they do not own. This finding has important implications for understanding a wide range of economic behaviors, including consumer behavior, bargaining, and pricing.

2. Mental Accounting: Thaler has also done extensive work on mental accounting, which is the way that people categorize and value different types of money or assets. He has shown that people tend to make economic decisions based on how they categorize their money rather than on objective financial principles.

3. Nudge Theory: Thaler is also a co-founder of "nudge theory," which suggests that small and subtle changes to the way choices are presented to people can have a big impact on their behavior. This theory has been used in a wide range of contexts, from encouraging people to save more for retirement to promoting healthy eating habits.

4. Behavioral Finance: Thaler has also made important contributions to the field of behavioral finance, which applies behavioral economics to financial markets. He has shown that investors often make systematic errors due to cognitive biases and emotions, and that these errors can have a significant impact on asset prices.

Thaler's work has been widely recognized in the field of economics, and he was awarded the Nobel Prize in Economics in 2017 for his contributions to behavioral economics. His research has not only helped to deepen our understanding of how people make decisions but has also had important practical implications for policy-makers and organizations in a wide range of fields.