In: Economics
describe nudge theory and discuss the insights it
provides for public policy
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.