Nudge Theory – Economic Current Affairs

Table of Contents

NUDGE THEORY Richard Thaler

What ?

Theory that provide insights about nudging people towards desirable behaviour even while preserving their liberty to choose.
Egs. Beti Bachao Beti Padhao, SBM

In detail

Policy shift that encourages people to make decisions that are in their broad self interest.
Doesn’t penalise, but makes easier to take certain decision.
Knowing how people think

Economic Survey

Advocated use of behavioural economics concept of nudge
Encourage desirable social and economic change
Recommended setting up a behavioural economics unit in the NITI Aayog

International examples

UK pension policy
Low savings among private sector workers
Automatic enrolment Scheme
Organ donation
Spain operates an opt-out system

Civil liberty

Doesn’t infringe civil liberties
Increasing becoming popular

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