Are nudges always good and sludges always evil?

Part of Squared Away newsletter series on nudging

Professor Richard Thaler is known to sign his books with "Nudge for good". But are nudges always good and sludges bad? In this post we take a look at the relationship between these two concepts. Could nudge be a double-edged sword?

Sludge is a relatively recent addition to the so-called nudge theory, characterized by Cass Sunstein as "frictions that make good decisions harder". When Richard Thaler introduced the term to the lexicon with the comment "less sludge will make the world a better place" by coupling friction with bad intent as the key criteria of sludge. They have also been described by Dilip Soman as "frictions in any process that impedes end users, and ultimately reduces welfare".

All in all, seems pretty evil and sinister.

The yin and yang of nudging

Or so I thought until I stumbled across an article published last month by LSE Fellow Dr. Stuart Mills where he boldly critiques the existing definitions as leaving "much to be desired" and the relationship between nudges and sludges as unclear. My curiosity got the better of me - nothing interesting is ever completely one sided!

The key argument proposed by the article is that whenever there is a nudge, there is also a sludge - there is a relationship between them created by symmetrical, relative friction. In other words, sludge is better defined as a novel reconceptualisation of nudging and not a separate term in itself.

Confused? Let's try an example from Dilip Soman:

Whenever a decision-maker faces an onerous series of checks to unsubscribe from a magazine subscription (i.e., sludge), they are simultaneously nudged towards keeping the subscription (Soman, 2020)

Therefore, if nudges sludge and sludges nudge, it's not possible for one of them to be good and the other one bad - instead, they are flipsides of the same coin. Let's quickly recap the original definition of a nudge by Thaler and Sunstein (2008) for a starting point on how we assume them to work:

A nudge... is any aspect of the choice architecture that alters people’s behavior in a predictable way without... significantly changing their economic incentives.

Although the original definition rules out economic incentives, it can include incentives and costs of other kinds. Some examples of psychological force used in nudging:

  • when a graphic health label makes you feel uncomfortable, it imposes an emotional tax on you

  • when you adjust your behaviour to fit in with others or to avoid social stigma - these types of non-material constraints can be surprisingly strong

  • when understanding is deliberately obscured

  • when default rules are used to leverage your psychological state rather than improving understanding

Relative friction

More theoretically speaking, three types of friction fall under the definition of nudging: hedonic, social and obscurant. The nudge/sludge symmetry emerges through understanding this relative friction:

Sludge is then positioned, in terms of frictions, relative to nudge: nudges decrease relative frictions, sludges increase relative frictions.

In other words, when a nudge decreases the frictions that come with a specific option, a sludge is imposed on all other options available. The controversial or radical thing about this framing is that it challenges the normative interpretation sludge as something inherently bad and also changes changes how we see the role of the choice architect.

Let's take some examples of friction.

Each of these can be used to encourage or discourage specific decision outcomes:

  1. Economic: changing the economic or material incentives (e.g. a premium charge for a specific option)

  2. Hedonic: changing the individual pleasure or comfort (e.g. adding a graphic health label to cigarette packaging)

  3. Social: changing the social or moral costs (e.g. informing households about the energy use of their neighbours)

  4. Obscurant: changing the psychological or cognitive burden (e.g. using excessive and complicated language in a document)

This leads us to the author's proposed definition: "nudges reduce frictions associated with a specified option, while sludges increase frictions associated with a specified option". Generally speaking, nudging should reduce frictions associated with a specific option or behaviour - and if it does, it simultaneously increases relative friction for all other options.

In other words, a nudge imposes a sludge:

A nudge/sludge is any aspect of choice architecture that decreases/increases the hedonic, social or obscurant frictions associated with a specific outcome relative to other outcomes and in doing so alters people’s behaviour in a predictable way without forbidding any options or significantly changing economic frictions. To count as a nudge/sludge, the intervention must be easy and cheap to avoid. Nudges/sludges are not mandates/penalties.

In short, the nudge/sludge symmetry challenges the so-far accepted definition of nudges as good and sludge as bad.

The choice architect's dilemma

Framing matters for intervention acceptance

As a consequence of this reframing, we need to rethink what language we use when discussing interventions. It's not a trivial question because we know that framing matters - and the choice to describe an intervention as a reduction or increase in frictions could have a big impact on how acceptable it is to people.

Using terms like good and bad is problematic because people have different definitions of what they mean. The solution could be to label interventions as nudges or sludges based on how the choice architecture is changed.

Interestingly for an academic paper, the author reached to the practitioner world for help in how to evaluate interventions by borrowing a list of questions from Stephen Wendel's Designing For Behavior Change book:

  1. What was developed as part of the intervention?

  2. How were these developments applied?

  3. What was the intended behavioural outcome?

Since one person's definition of good could be the opposite for another, a better way could be to think about the desired outcomes and their fairness to each side of the behavioural intervention:

  • Pareto nudges: both the decision-maker (the consumer) and the choice architect (the company) benefit from the outcome being nudged towards

  • Rent-seeking nudges: where only the choice architect benefits from the outcome of the nudge

Personally, these terms are good for the specificity required in academic literature - for everyday use we might find it easier to talk about win-win and win-lose nudges.

With this framing, we can also think of sludges for good :

  • cooling off periods

  • are-you-sure checks

  • disfluency (making a task cognitively difficult)

It's all relative

If we change our definition of nudges and nudging from a normative one (i.e. objective good/bad) to relative, interdependent friction, we can see the nudge/sludge symmetry. Focusing on the fairness of desired outcomes as well as the choice architect's motivation could allow us to see interventions from different perspectives more easily.

It's early days for this paper so it will be interesting to see what the response will be on the academic side. On the practitioner side, these definitions feel clear and easy to apply in commercial projects. Curious to hear other people's thoughts!

You can find more details and references in:

Mills, S. (2020). Nudge/sludge symmetry: on the relationship between nudge and sludge and the resulting ontological, normative and transparency implications. Behavioural Public Policy, 1-24.

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