On Sludges

I had (and have) sympathy for Navin, but I have to confess that I did enjoy reading this tweet, because it is very much a teachable moment:

Why is this a teachable moment?

Because firms have an incentive to make it as difficult for you to “leave”. They make it as easy, painless and frictionless as possible for you to “join”, and they make it as difficult, painful and, well, friction-full as possible for you to leave.

Here’s Richard Thaler and Cass Sunstein on this phenomena:

Perhaps the most basic principle of good choice architecture is our mantra: make it easy. If you want to encourage some behaviour, figure out why people aren’t doing it already, and eliminate the barriers at a standing in their way. If you want people to obtain a driver’s licence or get vaccinated, make it simple for them, above all by increasing convenience.
Of course this principle has an obvious corollary: if you want to discourage some behaviour, make it harder by creating barriers. If you want to make it harder for people to vote, forbid voting by mail and early voting, and reduce the number of polling stations (and place them far away from public transportation stops). While you’re at it, try to make people spend hours in line before they can vote. If you don’t want people to immigrate to your country, make them fill out a lot of forms and wait for months for good news in the mail (not by email), and punish them for answering even a single question incorrectly. If you want to discourage poor people from getting economic benefits, require them to navigate a baffling website and to answer a large number of questions (including some that few people can easily understand).

Nudge, by Richard Thaler and Cass Sunstein, Chapter 8, pp 151, Kindle Edition

And they have a term for it too – sludge:

Any aspect of choice architecture consisting of friction that makes it harder for people to obtain an outcome that will make them better off (by their own lights).


Does not getting spam mails in his inbox make Navin better off, by his own lights?

Yes, of course!

Does the design of the unsubscribe (I’m being generous here) form add friction to the process of Navin obtaining this outcome?

Yes, of course!

That’s sludge in action.


And once you “see” it, you begin to spot it everywhere. Newspapers and magazines make it difficult for you to cancel your online subscriptions and banks make it difficult for you to file a complaint with the banking ombudsman, to give you just two examples. I’m sure you can think of many more from your own life, and Chapter 8 of the book Nudge has many, many other examples. Please read the whole chapter (and if you’re willing to humor me, the whole book).

And finally, this might resonate with people of a certain age (or maybe, even now, all ages?):

If you have the Monday blues, and now have an irresistible urge to drop everything else and watch the whole episode instead, it’s S04E04.

You’re welcome.


EC101: Links for 7th November, 2019

  1. Idea Vodafone debt rating downgraded. Uh-oh.
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  2. “When Arun Sarin, Vodafone Group Plc’s India-born former CEO, was charting the British telecommunications firm’s expansion into emerging markets in the mid-2000s, his home country with more than a billion potential phone users seemed a compelling choice.Sarin wasn’t alone. Norway’s Telenor ASA, Russia’s Mobile TeleSystems PJSC and Malaysia’s Maxis Bhd were also among a slew of companies that flocked to this fast-growing market. The carriers banded with local partners, bid for airwaves and licenses, spending billions of dollars to prepare their networks.

    But what once appeared to be their most-promising Asian wireless market has turned sour. Vodafone’s Indian venture with billionaire Kumar Mangalam Birla, saddled with $14 billion of debt, is said to be seeking to revamp its borrowings amid mounting losses and a tariff war. Tycoon Sunil Mittal’s Bharti Airtel Ltd. is rated junk by Moody’s Investors Service. In a market that had a dozen carriers two years ago, just three are left standing today — two of them, barely.”
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    Here’s more context from Bloomberg.
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  3. “Notoriously high levels of pendency of cases discourage those with limited influence and resources from approaching the courts for justice. Police stations, especially those in rural areas, make registration of complaints and first information reports cumbersome to help them manage their strike rates. Some websites expect visitors to read privacy policies and indicate consent by checking specific boxes before letting them browse pages. The notice is sometimes in an unfamiliar language. Immigration applications involve onerous paperwork that is lengthy and confusing.”
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    Puja Mehra, author of the excellent “The Lost Decade” explains what sludge is, and why it matters in India
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  4. All incentives matter, but some incentives matter more than others. That’s the basic takeaway, but please, I beg you – take the time to read this article in full. Slate Star Codex is just utterly magnificent.
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  5. A fascinating article on the origins of the Amazon battery.