March 5, 1934
Israeli-American behavioral economist Daniel Kahneman is born in Tel Aviv while his mother is visiting relatives. He spends his early childhood in Paris and is there when the Nazis defeat France in 1940. His father is caught in a roundup early in the occupation but is released because of his connections to the founder of L’Oreal, Eugène Schueller. The Kahneman family flees Paris and remains refugees for the rest of World War II, and Kahneman’s father dies of complications from diabetes while on the run.
Kahneman moves to Palestine in 1948, shortly before the creation of the state of Israel. He graduates from the Hebrew University of Jerusalem in 1954 and serves in the Israel Defense Forces’ psychology department. He earns a doctorate from the University of California-Berkeley in 1961.
Throughout the 1960s and 1970s, he gains recognition for his work in Israel on cognitive psychology, judgment and decision-making, and he moves into behavioral economics by the late 1970s. With cognitive psychologist Amos Tversky, Kahneman writes the foundational text of prospect theory in 1979. He is awarded the 2002 Nobel Memorial Prize in Economics for developing that theory, which holds that humans often make decisions based on personal evaluations of gains and losses that can be flawed because of biases. A key finding by Kahneman and Tversky is that perceived losses tend to factor significantly more into decisions than proportional gains.
Kahneman’s interest in the 1990s shifts to hedonic psychology or happiness economics, focusing on what makes life pleasant, as part of the positive psychology movement. In 2009 he co-founds TGG Group, a management consulting firm that uses insights from big data and behavioral economics to drive efficiency in multiple industries.
In addition to the Nobel Prize, Kahneman’s awards include the U.S. Presidential Medal of Freedom. The Economist ranks him as the world’s seventh most influential economist in 2015, and Bloomberg includes him on its list of the 50 most influential people in global finance in 2011 and 2012. He is an emeritus faculty member in Princeton University’s psychology department.