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EC6001 -Explain is what meant by the term ‘nudge’ as far as government policy is concerned
Have you ever tried to analyse the rationale behind the Food and Drug Administration’s instruction to put bizarre images or cautionary notes on the packet of cigarette? Or why is it a norm to keep enrolling in govt. pension plan as default option for the employees in almost all developed nation? Or, why all on a sudden, Governments of United States of America, United Kingdom started setting up behavioural economics unit or employing famous behavioural economists as advisors in government policy formulation? Well, to analyse we have to delve into the topic of Nudge and how it is getting prominence in government policy making or shaping.
What is Nudge?
Behavioural economics is a unique approach to look into different aspects of economics taking reference from social insights (predominantly, psychological insights) into behaviour of human and their decision making. One of the most contemporary and significant application is being seen through Nudges in government policy making.