“Nudge” in Behavioral Economics – A Possible Response to the Challenges of High Inflation for “Better” Economic Decisions of the Individuals
“Nudge” in Behavioral Economics – A Possible Response to the Challenges of High Inflation for “Better” Economic Decisions of the Individuals

Author(s): Aygun Erturk-Mincheva, Plamen D. Tchipev
Subject(s): Social Sciences, Economy, Psychology, Business Economy / Management, Sociology, Behaviorism, Economic development, Socio-Economic Research
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: nudge; behavioral economics; Richard Thaler; inflation
Summary/Abstract: The behavioral economics upgrades the psychological characteristics of the economic agent, homo economicus, when analyzing an individual's decisions, emphasizing their biases. The nudge approach developed by Richard Thaler is a good tool for improving economic decisions made by the individual. The nudging policies, with their flexibility to different conditions, low financial burden, and low instrumental complexity, are widely applicable. The current high levels of inflation amplify the potential for nudges to improve the quality of people's economic decisions. This paper focuses on the possibilities of behavioral economics in the inequalities and promoting savings behavior provoked by current reality using smart disclosure and choice drivers, pre-commitment with setting consumption limits, and promoting the setting of aims.

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