Nudge Theory Microeconomics

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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 …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

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