Although the terms ‘nudge’ and ‘sludge’ have a more recent history, the idea of an environment impeding and facilitating certain behaviors was theorized as early as 1890. In 1890, American psychologist William James published a book, The Principles of Psychology, which suggested that people’s ability to get things done was impacted by the environments in which they were making decisions. 1
Two important behavioral scientists, Richard Thaler and Cass Sunstein, took James’ ideas a step further by suggesting that since people’s environments impact the decisions they make. Governments and other authorities can use small influences within people’s environments to push individuals towards certain behaviors. While not wanting to limit people’s freedom by suggesting people should be forced to make particular choices, Thaler and Sunstein believe that nudges can help people make more rational choices themselves, which they write about in their book Nudge: Improving Decisions About Health, Wealth, and Happiness:
“A nudge, as we will use the term, is any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentive.” 3
The framing effect shows us that the way options are presented to us matters. By understanding the cognitive biases that influence people’s thinking, Thaler and Sunstein hope that nudges can be used to reduce the fallacies that people fall victim to when making decisions. These should be well-intentioned; however, if choice architects can figure out what cognitive biases cause people to favour particular choices over others, they can also use the information to their own advantage rather than to help the consumers make the best choices for themselves. For example, companies may nudge customers toward more expensive products, therefore using available information about consumer decision-making to advance their own profit.
While Thaler and Sunstein originally thought nudges were a behavioral science tool that could help individuals, they soon realized that nudges also had the potential to be used to take advantage of people’s bounded rationality. 10 years after publishing their book Nudge, Thaler published an article entitled “Nudge, not sludge” which described activities that were “essentially nudging for evil” (431); in other words, sludges. 2 There is a distinction here between sludges as simply evil nudges, and sludges as a process, good or bad, that makes it more effortful to make a certain decision. The term is usually used in the latter sense but you’ll see both crop up throughout the literature.
Sunstein continued to examine sludges throughout his career, and has a book, Sludge, coming out this year. The book takes a look at all the administrative red tape people have to go through to get their most basic needs. As a result, Sunstein suggests that sludges actually prevent people from exercising their constitutional rights.