Abstract. Behavioral economics is a recently developed area of science which brings together information from the fields of economics, sociology and psychology. The knowledge which has resulted from this approach allowed decision makers to make improvements upon the way in which public policy is promoted by the government, by taking into consideration the natural preferences of individuals for certain types of behaviors. This paper will first present a comprehensive literature review of the results, which have been obtained in the study of nudges. However, in an effort to best show the practical value of a public policy, that includes nudges, the main focus of the paper will be the Behavioral Insight Unit. Also known as the Nudge Unit, this organization has collaborated with different branches of the British government and has helped them implement policies ranging from reducing medical prescription errors to improving commitment to job centers or even improving tax collections.

Keywords: Public policies, behavioral economics, nudge, unemployment.