Nudge, Sludge, Budge, and Fudge

Navigating the Behavioural Maze

Nudge. Sludge. Budge. Fudge. Four words that, at first glance, might seem like some whimsical musings of a lost mind. Given it’s me, it may very well not be far from the truth. But we’re here now…

In the realm of behavioural science though, these represent profound concepts that shape our understanding of human decision-making and policy design. Perhaps not Fudge, because I made that one up — but we’ll get to that.

Nudge: Guiding Gentle Choices

In their ground-breaking work, “Nudge,” Richard Thaler and Cass Sunstein introduced us to the concept of nudging — a subtle way of influencing behaviour by structuring choices to help people achieve their desired outcomes without restricting their freedom. It’s not about tricking people; it’s about making the right choice the easy choice. Thaler and Sunstein’s final edition of their book continues to emphasise that nudging is about benevolent choice architecture.

Take, for instance, the example of organ donation. Countries with an opt-out system (where everyone is considered a donor unless they choose not to be) tend to have much higher donation rates compared to those with an opt-in system (see “Do Defaults Save Lives” by Johnson & Goldstein, 2003).

This isn’t coercion — it’s a nudge, making it easier for people to become donors, aligning with many individuals’ willingness to donate but who might not have taken the active step to opt in. However, Thaler and Sunstein themselves go to great lengths to point out that they themselves would not necessarily promote a presumed consent approach (such as the opt-out system) because that doesn’t mean everyone actually chooses to be.

It’s important to understand what the nudge is trying to achieve and understand the choice architecture at play.

Sludge: The Hidden Friction

On the flip side of nudging is sludge — an insidious counterpart. Sludge refers to unnecessary friction that makes it harder for people to achieve their goals. Sunstein, in particular, has spoken about the dangers of sludge, noting that it often comes in the form of bureaucratic hurdles or convoluted processes that serve no purpose other than to frustrate and delay, outlined by Cass Sunstein in Sludge Audits, in 2020.

Applying for financial aid, or going through Centrelink or even trying to cancel a subscription — these are all sludge. When the paperwork or process is overwhelming, many will give up, deterred by the sheer complexity of it all. This sludge creates a barrier exacerbating inequalities in so many spaces. Sludge, in essence, is the enemy of efficient, equitable systems. It is also used to deter change to the benefit of revenue — like subscription models, and the like.

Positive sludge, would be where friction is created to support decision making by reducing the pathways to negative outcomes. Cooling off periods for big purchases, or self-exclusion for gambling sites — even placing unhealthy snacks in harder to reach places, are all examples of this — called Pro-social sludge.

Budge: The Gentle Push

Then there’s budge. Less commonly talked about but an interesting extension of nudge, budge sits somewhere between nudge and shove. Budging involves a more assertive intervention than nudging but stops short of outright coercion. It’s a gentle push in the direction of positive behaviour change, often used in public health initiatives.

Think of the “Stop Smoking” programs that offer free nicotine patches and counselling. These programs don’t just nudge by making quitting an easy option — they budge by providing resources and support to actively encourage people to stop smoking. You can read more about that in “Treating Tobacco Use and Dependence” by Michael Fiore et al, in 2008’s work for the US Department of Health and Human Services. Budging recognizes that some behaviours require more than just a nudge to change; they need a supportive push.

Fudge: The Sweet Trap

And now, let’s talk about fudge — my own contribution to this discussion. Fudge is great. You have your own preference — for me, a little drier, with a bit of a crumble as opposed to the softer, toffee like fudge. And a little too much of it, and you’re not feeling so great, and there’s a bit of that sugar burn in your throat. Entirely autobiographical.

Fudge is great in small doses. In this context it represents over-incentivizing to improve results. The problem with fudge is that while incentives can drive behaviour, too much reliance on them can lead to unintended consequences. Just as too much fudge can make you swear off the stuff, excessive incentives can distort behaviour.

A striking example of fudge can be seen in corporate sales environments where hefty bonuses are tied to sales targets. While this can drive short-term performance, it often leads to negative behaviours such as aggressive selling, corner-cutting, or even fraudulent acts.

The sales team may become so focused on the incentive that they lose sight of customer satisfaction and ethical standards. Studies, such as those by Dan Ariely in “Payoff: The Hidden Logic That Shapes Our Motivations,” show that while incentives can motivate, they often crowd out intrinsic motivation and ethical considerations.

The Misconceptions and Realities

There’s a common misconception that nudges are covert manipulations, a way to trick people into making certain decisions. But as Thaler and Sunstein argue, nudging is about helping people make choices that align with their own goals. It’s about creating environments where the path of least resistance leads to beneficial outcomes.

Public policies that incorporate nudging are not about removing choice but about enhancing it. For instance, placing healthier food options at eye level in school cafeterias doesn’t force kids to eat better — it just makes it more likely they will. Research from the Behavioural Insights Team in the UK has shown that such interventions can significantly improve dietary choices among students.

The FORGOOD framework gives you an excellent pathway as an ethics framwork for the application of these behavioural techniques, based on the paper Nudge FORGOOD by Leonhard K. Lades and Liam Delaney

A great illustration of the framework, via BehaviourWorks, and the original artist here

Nudge, sludge, budge, and fudge. Each plays a distinct role.

Nudges guide us gently toward better choices; sludge hinders us with unnecessary obstacles; budges push us softly but firmly in the right direction; and fudge warns us of the perils of over-incentivizing.

These concepts offer invaluable insights into crafting public policy, designing corporate strategies, or simply looking to understand the complex dance of human behaviour.

The goal is to create systems that nudge us toward our better selves, clear away the sludge, provide the right budges when necessary, and avoid the pitfalls of excessive fudging.

In the end, understanding these behavioural tools empowers us to design environments that foster positive, sustainable change.

Remember the delicate balance of nudging, the dangers of sludge, the necessity of a budge, and the sweet but sometimes treacherous allure of that sweet sweet fudge.