objectives of economic agents, behavioural economics, nudge theory
For many years, governments have been busy finding solutions to these problems to help citizens under circumstances where their judgement might be considered compromised. A traditional paternalistic view of government would advise introducing regulation and policies to incentivise citizens to ‘do the right thing’. Here, the ‘carrot-and-stick’ approach would offer rewards to persuade people to change their behaviour or punish them if they refused to do so. However, and with great surprise, research has shown that monetary incentives do not always work, and sometimes may crowd out individuals’ motivation to ‘do the right thing’.
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