Budiha, Nikshep Basavaraj2024-12-232024-12-232023International Journal of Current Science (IJCSPUB). 13(4); 2023; 876-883.2250-1770https://rjpn.org/ijcspub/viewpaperforall.php?paper=IJCSP23D1100http://khandolacollege.ndl.gov.in/handle/123456789/105The study delves into the pervasive role of incentives in economic theory and practice, unraveling their impact on decision-making at individual, business, and government levels. In microeconomics, incentives guide consumer choices, influencing the intricate dance of supply and demand in the marketplace. At the macroeconomic scale, governments employ incentives through policies and regulations to shape the collective destiny of nations. Moving beyond theoretical constructs, this study highlights the omnipresence of incentives in shaping the economic landscape. The literature review examines studies on incentives' impact on organizational productivity, emphasizing the multifaceted nature of incentives and the need for tailored structures. Recent studies explore the correlation between financial incentives and employee performance, shedding light on the nuanced interplay between motivation and productivity. The study's objectives include comprehending the economic significance of incentives and examining them through analytical equations. Using fundamental economic equations, the paper illustrates how incentives, whether in the form of price adjustments or subsidies, directly influence economic decision-making at both consumer and firm levels. This quantitative framework provides insights into the intricate dynamics of incentives, revealing their role as catalysts that propel economies forward.enSOCIAL SCIENCES::Business and economics::EconomicsArticle