Behavioural economics: how nudge turned into sludge

Is it ill-will, arrogance or just incompetence? Sludge – the reverse of nudge – is everywhere, writes UNSW Business School's Frederik Anseel

"Sludge, what are you talking about?" you might wonder. Sludge is the reverse of nudge. Let me give an example. Two months ago, I tried to cancel my Financial Times digital subscription. I don't have much time to read that newspaper during the week and on the weekend I prefer to read it on paper.

After a dozen clicks I got three pages with questions like 'are you sure you want to cancel?', 'why do you want to cancel?, 'if you click here you’re cancellation will be cancelled', and 'please don't leave us, we want you back.' With death's contempt and quixotic energy, I kept clicking and eventually I came to the screen confirming that my subscription had been cancelled. Oof.

Until a month later, when I saw that another $70 went out of my account. My account now just says 'subscription renewed on July 30'. 'Call them up!' you say? Hahaha, you believe in fairy tales.

This kind of psychological game-playing is now everywhere and every day in our lives. Cancelling a service with digital services, subscriptions, newsletters is like eradicating weeds. Sludge is the name of the weed. And sludge does not perish.

Frederik Anseel UNSW Business School.jpeg
UNSW Business School's Frederik Anseel says a nudge is a strategy that helps people make good choices in simple ways. Photo: supplied

Sludges and nudges

What does sludge have to do with nudge? Nudge is a strategy to help people make better choices based on behavioural economics insights. Basically it comes down to making choices that are good for people as simple as possible. For example, you ensure that people are registered as organ donors by default. They have to fill out a form to not be an organ donor. Because people are lazy by nature, they simply stick with the easy choice. Nudging might be a bit paternalistic because it involves someone (the “nudger”) thinking they know better what is good for other people. For example, it helps people make better pension savings, insurance or health.

Nudge is also used by companies. You will experience for yourself how easy it is to subscribe to a streaming service. Two clicks and it's done, easy. That's nudging. But cancel that subscription again, oh no! Sludge aims to make it as difficult as possible for you to make a choice that is against the company’s interests.

A special place in hell is reserved for banks and government departments. They often require you to physically show up at times that happen to suit them for simple administrative tasks. A few months ago, I travelled back to Belgium and rushed back to the city hall of the place I was born in to register a form from Australia. It was confirmed to me that this would not be a problem.

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I made an appointment well in advance, waited dutifully in line, but was told at the counter: 'Ah, I see here in the computer that your last legal residence in Belgium was in another city. That means I can't register your form here. You must go to that other city.' Computer says no.

I tried to explain with hands and feet that I live in Australia, that it is practically not feasible to make another appointment in another Belgian city to stand in line there for three hours. No solace.

At one point, the Belgian administration forced me to take a plane from Sydney to the Belgian embassy in Canberra, just to pick up a small piece of paper with a four-digit code. 'Yes, because look, we can only hand over that code to you on a piece of paper'.

It drives me mad. Away with sludge!

Frederik Anseel is Professor of Management and Senior Deputy Dean (Research & Enterprise) at UNSW Business School. His research focuses on the motivational micro-foundations of how people contribute to organisational success. For more information, please contact Prof. Anseel directly. A version of this post was first published in De Tijd.


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