When Greenwashing Exploits Consumer Heuristics: Information Overload, Bounded Rationality, and Implications for Consumer Protection

Greenwashing persists not only because firms are motivated to inflate their sustainability claims but also because consumers, limited by bounded rationality, depend on heuristics when overwhelmed with information. This conceptual article uses behavioral economics to connect specific types of greenwashing and greenhushing to affect, availability, representativeness, attribute substitution, and default effects in real consumption situations. We focus on how vague or selective sustainability claims, the proliferation of eco‐labels, and complex disclosure rules interact with consumer vulnerability and undermine mindful consumption, even when intentions are environmentally friendly. We then examine how existing green claims regulation and consumer protection strategies might unintentionally favor persuasive but weak signals over standardized and auditable information. The article argues that policies against greenwashing must redesign choice architecture and disclosure systems so that credible sustainability claims are easier to notice, interpret, and compare than opportunistic messages, thereby enhancing marketplace fairness and long‐term consumer welfare.