SA
Skip to main content

Perverse Incentive

An economist named Horst Siebert coined the term "cobra effect" after hearing a story about an incident in India during British rule. The British government was worried about the high number of venomous cobras in Delhi, so they offered a cash reward for every dead cobra. At first, this strategy worked well, as many snakes were killed for the reward. However, some people exploited the situation by breeding cobras for profit. When the government found out, they stopped the reward program. Unfortunately, the cobra breeders released their now-worthless snakes into the wild, causing the cobra population to increase even more. This story is often used to illustrate Law of Goodhart or Law of Campbell.

Links to This Note

Martin Shkreli의 마약 문제를 E-ACC로 해결한다는 가설

... 걸맞다. 과연 이대로 작동할까? 완벽하게 코브라 효과에 들어맞는다.