Ever tried cancelling a subscription only to find yourself trapped in an endless maze of menus, phone calls, and confirmation emails? Congratulations—you've encountered sludge.

In behavioural economics, sludge refers to unnecessary friction that makes it harder for consumers to achieve their desired outcome. Unlike "nudges," which gently steer people towards better decisions, sludge works in the opposite direction. It exploits procrastination, inertia and limited attention to influence behaviour in ways that often benefit firms rather than consumers.

Businesses have become remarkably good at designing sludge into everyday decisions. Signing up for a streaming service takes seconds, yet cancelling may require navigating multiple webpages or speaking to a customer service representative. Airlines advertise enticingly low fares before gradually adding baggage charges, seat selection fees and booking costs. Even something as simple as rejecting website cookies can involve dozens of clicks while "Accept All" sits prominently on the screen.

Why does this happen? The answer lies in incentives. Every customer who gives up on cancelling a subscription, accepts unnecessary cookies or pays unexpected fees increases company revenue. Firms know that many consumers value convenience more than the small savings from overcoming these barriers. Behavioural biases such as status quo bias and present bias mean people often choose the easiest option, even when it costs them more.

However, sludge creates economic inefficiency. Consumers waste valuable time, markets become less transparent, and competition weakens because switching providers becomes costly. Instead of competing on price or quality, firms compete by making it difficult for customers to leave.

Recognising these problems, regulators are beginning to crack down on excessive sludge through clearer pricing rules and simpler cancellation processes. For economists, sludge is a powerful reminder that markets are shaped not only by prices and incentives but also by the design of the choices consumers face. Sometimes, the greatest barrier to competition isn't cost—it's simply too much friction.