The Cobra Effect (Perverse Incentives)
An incentive rewards the problem it was meant to solve — pay per cobra and people breed cobras. Any reward system will be optimised literally; design for the behaviour the reward actually pays for.
An everyday example
Bonuses for closed tickets producing tickets split into three; bounties per bug producing bugs planted.
What it can cost you
Incentives you designed producing the opposite of what you intended; counterparts responding to your incentive, not your hope.
Warning signs
- People are hitting the incentive and missing the point.
- The reward pays for the proxy.
One thing to do
Before launching any incentive, ask how a clever, selfish person would maximise it; if that behaviour is not what you want, redesign.
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