Question

In: Economics

describe nudge theory and discuss the insights it provides for public policy

describe nudge theory and discuss the insights it provides for public policy

Solutions

Expert Solution

Nudge theory is a modern theory that brings insights into behavior of people, their decision making process helps leaders and institutions to design a plan that achieves its objectives by relying on the actual decision making done by the people. So, nudge theory is the way to bring efforts or positive reinforcements that can improve the decision making process as well as the behavior of the people.

The nudge theory brings insights that is helpful to the makers of the public policy. A public policy is made to help people and bring necessary modifications, then it is very important for them to apply nudge theory. For example, it is the leadership that decides regarding how people think and exhibit the behavior. But, when Nudge theory is applied, leaders rely on actual behavior, thinking process, and approaches in decision making process. Once, it is done, then public policy becomes very effective. Further, nudge theory relies on positive incentives that can encourage people to modify the behavior to gain those incentives. It brings a welcome change in the decision making process and people get motivation to follow the public policy as it will bring the positive reinforcements to them and people will repeat their behavior. It will make changes to be easier and public policy will achieve the objectives.


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