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Paper Title
NUDGE THEORY AND ITS BEHAVIOURAL IMPACT ON STAKEHOLDERS: A PERSPECTIVE UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016
Authors
CA. Pradeep Kabra , Dr. MUKESH KUMAR SHARMA
Keywords
NUDGE THEORY
Abstract
Abstract: In modern regulatory systems, the integration of behavioral economics into legal frameworks has gained prominence, especially in areas where financial decisions are influenced by human psychology. Traditional economic models assume that individuals act rationally in their self-interest; however, real-world behavior often deviates due to cognitive biases, heuristics, and framing effects. Nudge Theory, developed by Thaler and Sunstein, offers a way to influence such behavior subtly by structuring choices in a way that encourages better decision-making without restricting freedom. Legal mechanisms, particularly those dealing with financial distress and recovery, increasingly rely on these behavioral tools to align stakeholder actions with broader economic goals.
This article examines the Insolvency and Bankruptcy Code, 2016 (IBC) through the perspective of Nudge Theory, highlighting how the Code reshapes the decision-making environment for stakeholders such as promoters, creditors, investors, and insolvency professionals. By embedding nudges like making resolution the default outcome, enforcing disclosure norms, simplifying legal procedures, and leveraging loss aversion, the IBC promotes timely resolution and responsible financial behavior. The article evaluates the behavioral impact of these provisions, outlines their successes in improving recovery rates and reducing NPAs, and discusses ongoing challenges that hinder optimal outcomes. Ultimately, the IBC serves as a compelling example of how behavioral economics can enhance the effectiveness of legal-economic reforms
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IJRTI — journal style
"NUDGE THEORY AND ITS BEHAVIOURAL IMPACT ON STAKEHOLDERS: A PERSPECTIVE UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016", IJRTI - International Journal for Research Trends and Innovation (www.ijrti.org), ISSN:2456-3315, Vol.10, Issue 9, page no.a475-a480, September-2025, Available :https://ijrti.org/papers/IJRTI2509054.pdf
APA — 7th edition
Kabra, C. P., & SHARMA, M. K. (2025). NUDGE THEORY AND ITS BEHAVIOURAL IMPACT ON STAKEHOLDERS: A PERSPECTIVE UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016. International Journal for Research Trends and Innovation, 10(9), a475-a480. https://ijrti.org/viewpaperforall.php?paper=IJRTI2509054
MLA — 9th edition
Kabra, CA. Pradeep, and MUKESH KUMAR SHARMA. "NUDGE THEORY AND ITS BEHAVIOURAL IMPACT ON STAKEHOLDERS: A PERSPECTIVE UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016." International Journal for Research Trends and Innovation, vol. 10, no. 9, 2025, pp. a475-a480, https://ijrti.org/viewpaperforall.php?paper=IJRTI2509054.
Chicago — 17th, bibliography
Kabra, CA. Pradeep, and MUKESH KUMAR SHARMA. "NUDGE THEORY AND ITS BEHAVIOURAL IMPACT ON STAKEHOLDERS: A PERSPECTIVE UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016." International Journal for Research Trends and Innovation 10, no. 9 (2025): a475-a480. https://ijrti.org/viewpaperforall.php?paper=IJRTI2509054.
Harvard — author–date
Kabra, C.P. and SHARMA, M.K. (2025) 'NUDGE THEORY AND ITS BEHAVIOURAL IMPACT ON STAKEHOLDERS: A PERSPECTIVE UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016', International Journal for Research Trends and Innovation, 10(9), pp. a475-a480. Available at: https://ijrti.org/viewpaperforall.php?paper=IJRTI2509054
IEEE — numbered reference
C. P. Kabra and M. K. SHARMA, "NUDGE THEORY AND ITS BEHAVIOURAL IMPACT ON STAKEHOLDERS: A PERSPECTIVE UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016," IJRTI, vol. 10, no. 9, pp. a475-a480, Sep. 2025.
Vancouver — biomedical
Kabra CP, SHARMA MK. NUDGE THEORY AND ITS BEHAVIOURAL IMPACT ON STAKEHOLDERS: A PERSPECTIVE UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016. IJRTI. 2025 Sep;10(9):a475-a480.
AMA — 11th edition
Kabra CP, SHARMA MK. NUDGE THEORY AND ITS BEHAVIOURAL IMPACT ON STAKEHOLDERS: A PERSPECTIVE UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016. IJRTI. 2025;10(9):a475-a480. Accessed at https://ijrti.org/viewpaperforall.php?paper=IJRTI2509054
BibTeX — Zotero, Mendeley, LaTeX
@article{IJRTI2509054,
author = {CA. Pradeep Kabra and MUKESH KUMAR SHARMA},
title = {NUDGE THEORY AND ITS BEHAVIOURAL IMPACT ON STAKEHOLDERS: A PERSPECTIVE UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016},
journal = {International Journal for Research Trends and Innovation},
volume = {10},
number = {9},
pages = {a475-a480},
year = {2025},
month = {September},
issn = {2456-3315},
url = {https://ijrti.org/viewpaperforall.php?paper=IJRTI2509054}
}
RIS — EndNote, RefWorks
TY - JOUR
AU - Kabra, CA. Pradeep
AU - SHARMA, MUKESH KUMAR
TI - NUDGE THEORY AND ITS BEHAVIOURAL IMPACT ON STAKEHOLDERS: A PERSPECTIVE UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016
T2 - International Journal for Research Trends and Innovation
JA - IJRTI
VL - 10
IS - 9
PY - 2025
SN - 2456-3315
UR - https://ijrti.org/viewpaperforall.php?paper=IJRTI2509054
SP - a475-a480
ER -
Issue
Volume 10 Issue 9,
September-2025
Pages : a475-a480
Other Publication Details
Paper Reg. ID
IJRTI_206199
Published Paper ID
IJRTI2509054
Downloads
205,647
Research Area
Management
Country
Surat, Gujarat, India
Published
September 2025
Published Paper PDF
https://ijrti.org/papers/IJRTI2509054.pdf
Published Paper URL
https://ijrti.org/viewpaperforall.php?paper=IJRTI2509054
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International Journal for Research Trends and Innovation
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2456-3315
ISSN
10.57
Impact Factor
2016
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No external funding was received for this study.
Conflict of Interest
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Acknowledgements
The authors would like to thank the reviewers and the editorial board of International Journal for Research Trends and Innovation for their careful reading and constructive comments, and all colleagues who supported the preparation of this manuscript.
