Sludge
Excessive friction that obstructs people from acting in their own best interest.
What it means
Sludge is excessive or unjustified friction in a process — confusing forms, hidden steps, long waits, hard-to-find cancellation paths — that makes it harder for people to do what is good for them or to claim what they are owed. It is the dark mirror of a nudge: where a good nudge removes friction to ease a beneficial action, sludge adds friction to deter or trap, whether through neglectful design or deliberate intent. The mechanism is the same psychology that makes nudges work — small hassles disproportionately reduce follow-through — turned against the chooser, so that procrastination and present bias keep people from completing onerous steps. Sludge can be benign or even useful when friction guards against fraud or impulsive decisions, but it becomes harmful when it impedes legitimate access to rebates, benefits, refunds, or unsubscribes. A 'sludge audit' is the proposed remedy: systematically measuring and stripping out unnecessary friction. It matters because hidden friction quietly shapes who gets benefits and who abandons claims, and because it is increasingly recognized as a deceptive practice in subscriptions and public administration.
Examples
A subscription you can sign up for in one click but can only cancel by phone during limited business hours.
A mail-in rebate demanding the original barcode, the receipt, and a form postmarked within fourteen days. The firm is quietly banking on most buyers never claiming the money it advertised.
An insurer that settles small claims in one click but asks for three forms, a loss adjuster's visit, and a phone appointment before it will honour a large one.
First described in Thaler (2018); Sunstein.