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Incentives

Cobra Effect

Perverse Incentives.

The article

If

A solution designed to fix a problem creates a worse problem. In colonial India, a bounty on cobras led people to breed cobras for the reward. When the bounty was cancelled, breeders released their stock, making the problem worse.

Then

For every incentive you create, ask: "If someone wanted to game this, how would they?" If you can find a way, the design is wrong.

Unless

Second-Order Effects Analysis / System Dynamics

Source

Horst Siebert, Der Kobra-Effekt: Wie man Irrwege der Wirtschaftspolitik vermeidet (2001).

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See also