Finance:Sludge theory
In behavioral economics, sludge is any form of design, administrative, or policy-related friction that systematically impedes individuals' actions or decisions.[1][2][3] It encompasses a range of frictions such as complex forms, hidden fees, and manipulative defaults that increase the effort, time, or cost required to make a choice, often benefiting the designer at the expense of the user's interest.[1][4][5]
The concept of sludge highlights the importance of transparent and user-friendly design in promoting welfare, efficiency, and equity in decision-making processes.[1]
Sludge was popularized by behavioral economist Richard Thaler and legal scholar Cass Sunstein. They introduced it as the "dark cousin" of nudging in their book Nudge: Improving Decisions About Health, Wealth, and Happiness.
See also
References
- ↑ 1.0 1.1 1.2 Sunstein, Cass R. (2023). Advanced introduction to behavioral law and economics. Elgar advanced introductions series. Northampton: Edward Elgar Publishing. ISBN 978-1-0353-2314-2.
- ↑ Newall, Philip W. S. (July 2023). "What is sludge? Comparing Sunstein's definition to others'". Behavioural Public Policy 7 (3): 851–857. doi:10.1017/bpp.2022.12. ISSN 2398-063X. https://research-information.bris.ac.uk/files/321458464/Review_of_sludge_Newall.pdf.
- ↑ Thaler, Richard H. (2018-08-03). "Nudge, not sludge". Science 361 (6401): 431. doi:10.1126/science.aau9241. ISSN 0036-8075. PMID 30072515. Bibcode: 2018Sci...361..431T. https://www.science.org/doi/10.1126/science.aau9241.
- ↑ Shahab, Sina; Lades, Leonhard K. (19 April 2021). "Sludge and transaction costs". Behavioral Public Policy 8 (2): 327–348. doi:10.1017/bpp.2021.12. http://dspace.stir.ac.uk/retrieve/fadd7aa7-5b2a-4ce2-ab97-d41ad80267f6/sludge-and-transaction-costs.pdf.
- ↑ "Sludge" (in en). https://thedecisionlab.com/reference-guide/psychology/sludge.
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