Relationship of The Nudge theory to Microeconomics
The nature of decisions that are made in the business environment vary because of many reasons. Human actions or behaviors play a primary function in influencing the business sector. Microeconomics deals with the impact of human beings, through their actions and practices in shaping business industry. Their actions form part of behavioral economics. The behavioral economics sector is mainly influenced or determined by the concepts of the nudge theory. Microeconomics involves the study of the tendencies that occur in economics. The economic tendencies are influenced by the choices made by individuals or the changes that take place in the production factors. This work describes the relationship that exists between the nudge concepts and the present day microeconomics. Nudge refers to a concept that was first applied to behavioral economics. The theory asserts that positive reinforcements determine the decisions made by individuals in the business sector. As a modern concept and theory, it evaluates how we think, behave and also make decisions. The nudge concept enables people to improve their decision making process and also in managing change. It has been widely applied in behavioral economics (Thaler & Sunstein, 2008). However, its current applications extends to the exploration and understanding of the influences that people make not only in the business sector but also on other many sectors of the economy (Andrew, 2008). Its primary role is to create changes in people which influence their central behavior. The design of choices influences the decisions that we make in our lives. How we design our choices should be on the basis of how we think and make certain decisions. It should be based on our instincts and irrational reasoning. Nudge theory does not accept the traditional ways of thinking. In the business organizations, people often make decisions that are never good and cannot achieve the intended objectives (Thaler & Sunstein, 2008). The nudge concept stipulates that human beings have some capabilities, knowledge and attitudes towards certain things …show more content…
Where certain opportunities and influences are not helpful or significant to people, the nudge concept becomes applicable (Andrew, 2008). In such a situation, we can apply the nudge theory in order to find the best choices or to make the right decisions that can have positive impacts to our lives. The nudge theory is very important as a factor that may influence the self-development and self-evaluation of individuals (Thaler & Sunstein, 2008). Through self-evaluation, a person can identify his or her own situation and see the best strategies to use so that the best outcome can be achieved. The nudge theory can help in the management of organization. It can shape the style of leadership employed in a given organization. To be specific, the nudge concept does not encourage the use of an autocratic style of leadership. The nudge theory tends to reduce confrontations and resistance to change that is often done by workers in various organizations. The nudge concepts when applied in any work environment are always easier for people to adapt to. It provides methods that are less threatening to people within any work place (Andrew, 2008). The nudge methods provide pleasure at any work atmosphere. It emphasizes on proper coordination and cooperation between people that ensures the best work performance or work outcomes. As human beings, we are faced with different situations that require the application of nudge theory to guide us on our decision making
The nature of decisions that are made in the business environment vary because of many reasons. Human actions or behaviors play a primary function in influencing the business sector. Microeconomics deals with the impact of human beings, through their actions and practices in shaping business industry. Their actions form part of behavioral economics. The behavioral economics sector is mainly influenced or determined by the concepts of the nudge theory. Microeconomics involves the study of the tendencies that occur in economics. The economic tendencies are influenced by the choices made by individuals or the changes that take place in the production factors. This work describes the relationship that exists between the nudge concepts and the present day microeconomics. Nudge refers to a concept that was first applied to behavioral economics. The theory asserts that positive reinforcements determine the decisions made by individuals in the business sector. As a modern concept and theory, it evaluates how we think, behave and also make decisions. The nudge concept enables people to improve their decision making process and also in managing change. It has been widely applied in behavioral economics (Thaler & Sunstein, 2008). However, its current applications extends to the exploration and understanding of the influences that people make not only in the business sector but also on other many sectors of the economy (Andrew, 2008). Its primary role is to create changes in people which influence their central behavior. The design of choices influences the decisions that we make in our lives. How we design our choices should be on the basis of how we think and make certain decisions. It should be based on our instincts and irrational reasoning. Nudge theory does not accept the traditional ways of thinking. In the business organizations, people often make decisions that are never good and cannot achieve the intended objectives (Thaler & Sunstein, 2008). The nudge concept stipulates that human beings have some capabilities, knowledge and attitudes towards certain things …show more content…
Where certain opportunities and influences are not helpful or significant to people, the nudge concept becomes applicable (Andrew, 2008). In such a situation, we can apply the nudge theory in order to find the best choices or to make the right decisions that can have positive impacts to our lives. The nudge theory is very important as a factor that may influence the self-development and self-evaluation of individuals (Thaler & Sunstein, 2008). Through self-evaluation, a person can identify his or her own situation and see the best strategies to use so that the best outcome can be achieved. The nudge theory can help in the management of organization. It can shape the style of leadership employed in a given organization. To be specific, the nudge concept does not encourage the use of an autocratic style of leadership. The nudge theory tends to reduce confrontations and resistance to change that is often done by workers in various organizations. The nudge concepts when applied in any work environment are always easier for people to adapt to. It provides methods that are less threatening to people within any work place (Andrew, 2008). The nudge methods provide pleasure at any work atmosphere. It emphasizes on proper coordination and cooperation between people that ensures the best work performance or work outcomes. As human beings, we are faced with different situations that require the application of nudge theory to guide us on our decision making