Rabin's research focuses primarily on incorporating psychologically more realistic assumptions into empirically applicable formal economic theory.

His topics of interest include errors in statistical reasoning and the evolution of beliefs, effects of choice context on exhibited preferences, reference-dependent preferences, and errors people make in inference in market and learning settings.

[6] Rabin has also been a visiting professor at M.I.T., London School of Economics, Northwestern, Harvard, and Caltech, and a visiting scholar at the Center for Advanced Study in Behavioral Sciences at Stanford, and the Russell Sage Foundation.

Rabin works on the economics of individual self-control problems, reference-dependent preferences, fairness motives and mistakes in probabilistic reasoning.

In 2001, he was awarded the John Bates Clark Medal by the American Economic Association[7] and also the MacArthur "Genius" Fellowship.