SSRN: From balance sheet arithmetic to cognitive capture: a neurodigital theory of uncontrolled consumption and insolvency induction

Abstract

This article proposes a radical rereading of insolvency in the algorithmic era, where financial decisions no longer emerge from a rational subject, but from a heuristic debtor shaped by digital architectures that exploit cognitive and affective vulnerabilities. The convergence between consumer, investment and betting platforms has transformed indebtedness into an emotionally induced and technologically directed process. In this environment, algorithmic opacity, gamification, and the elimination of transactional frictions erode the economic autonomy of the individual. Thus, insolvency ceases to be a mere equity imbalance to become the foreseeable outcome of an ecosystem that manufactures "winners who lose" and digitizes assets, subjecting them to tokenization and conditional liquidity logics. The article argues that classic bankruptcy law is insufficient to address this reality, so it proposes to integrate neuroscience, behavioral economics and algorithmic studies as pillars of a new regulatory design capable of confronting the structural manipulation of financial behavior.

Keywords: Digital insolvency, heuristic debtor, algorithmic opacity, cognitive vulnerability, choice architecture

JEL Classification: K35, D91, O33, D87, D18

Linkn to SSRN:   https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6893865