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Sunday, May 03, 2020

Will COVID change peoples behavior in India?- Nudge theory

There are comments that Indians will be better disciplined- follow Q, do not litter garbage etc after COVID19. 

Expectations are based on Nudge theory.
According to Thaler and Sunstein , a nudge is:
any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid. Nudges are not mandates. Putting the fruit at eye level counts as a nudge. Banning junk food does not.

Richard Thaler bagging this year’s Economics Nobel for his work on behavioural economics has shone the spotlight on the ‘Nudge Theory.’ Thaler’s and Cass Sunstein’s 2008 book Nudge: Improving Decisions about Health, Wealth and Happiness has had a wide impact with some governments even setting up ‘nudge units’ in their countries.Humans, being not-so-rational, often need encouragement or intervention — a nudge — to get going and do what’s best for the country or society at large. The ‘Nudge Theory’ recognises this behavioural trait. It says that people, rather than being forced, can be encouraged and influenced to pursue or desist from certain actions through nudges. Nudges are not mandates. So, while there is encouragement, there is no compulsion to comply and people have the freedom to choose other options.

Applying nudges is that public policy makers might thus supplement – or, perhaps, even replace traditional regulation with nudges to influence people’s everyday choices and behaviors in cheaper, less invasive, and more effective ways. That is, nudging seems to offer policy makers an effective way to influence citizens’ behavior without further restricting freedom of choice, imposing mandatory obligations, or introducing new taxation, or tax reliefs.

Public policy examples of ‘Nudge’ at work include automatic enrollment of employees into pension schemes in the UK and the opt-out system for organ donation in Spain. By making the optimal choice the default option for all citizens, these nudges have helped improve public participation in these programes.

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