THE COBRA EFFECT

The Cobra effect is where an incentive unintentionally rewards a person for making the issue worse.

 

As the story goes…Delhi was infested with cobras so the locals were incentivized to kill them and claim a bounty reward for each head. This resulted in cobra farming, the opposite of what was intended… And to make matters worse, when the initiative was stopped, the breeders released their cobras, creating an even greater issue than what was experienced in the first place.

 

When it comes to this in our teams, some of us have made mistakes with Perverse Incentives and there were no winners. Suggest keeping it simple and exploring all scenarios before implementing.

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