By offering insights into how humans think and act, the Nudge Theory can be used to drive favourable behaviour and avoid unfavourable ones but while there is encouragement, there is no compulsion to comply and people have the freedom to choose other options.
‘Nudge Theory’ has applications in varied fields such as public policy, personal finance and investment planning. For example, tax breaks often are used as nudge to encourage people to invest in financial instruments in place of gold or property.