5 ms·
Incentives and the Cobra Effect
- yoz 3y agoFor a hilarious short story about the Cobra Effect taken to extremes, check out Julian Gough's "The Great Hargeisa Goat Bubble": https://thefinanser.com/2009/05/the-great-hargeisa-goat-bubble https://thefinanser.com/2009/05/the-great-hargeisa-goat-bubb...
- kulor 3y agoAn anecdote from our early per-seat pricing model is that we kept running into odd customer service issues that after lots of digging kept coming back to users sharing login details (to avoid paying for extra seats). Without getting into details, a lot of the value of our platform is derived from having discreet users connected to an organization. Rather than restricting or trying to educate people not to share accounts, we changed the pricing structure to a flat subscription which almost comically led to an explosion in new user account creation. This led to our customers getting the full intended value which led to a big reduction in churn and an increase in WoM referrals.
- waqf 3y agoDiscreet users, or discrete users? (I initially assumed you meant discreet, i.e. not wanting to share login details, but the comment read oddly as a result.)
- kulor 3y agoSavvy observation. I meant to say discrete, though there's a healthy bit of irony in the typo
- nness 3y agoSomething I hope Netlify discovers...
- HWR_14 3y agoI do not believe Netflix is still relying on word of mouth advertising
- RcouF1uZ4gsC 3y agoIs the Cobra effect story true or is it a racist British/Western trope “Look how devious and greedy the Indians/natives are, even when we are trying to make their lives better?” Can you really breed Indian cobras in a home in captivity? Cobras are very good hunters and trying to keep them confined (remember how they are freed at the end of the story) and feed a growing population yourself is likely to take some time and effort, perhaps money that might not be worth the bounty?
- spacecadet 3y agoIm inclined to believe this theory based purely on how miss leading most written history has shown to be in terms of racism.
- bradrn 3y agoHowever, a very similar story has been proven true (or so Wikipedia claims): https://en.wikipedia.org/wiki/Great_Hanoi_Rat_Massacre https://en.wikipedia.org/wiki/Great_Hanoi_Rat_Massacre
- RcouF1uZ4gsC 3y agoThat story comes via the French and I don’t think it passes the sniff test. In what scenario is it easier to cut the tail of a living (fighting) rat, than to kill it first and the cut the tail off a dead rat?
- 2cynykyl 3y agoI think the point is that people were breeding rats so that they could make more money. Then when the ended the 'program', the rats just got released, making the problem worse, no?
- sokoloff 3y agoIt's a matter of the payoff though. Sure, it's easier to cut the tail off a single dead rat than a single live rat. But if your goal is to maximize the number of rat tails you end up with, cutting it off a live rat is probably worth the additional effort.
- mihaic 3y agoWhile this story was initially against the hubris of controlling a complex system through incentives, since second or third order effect are hard to predict, I think over time the takeaway has degenerated into "you can't have any centrally pushed incentives". Not sure when the aim to strike a balance was lost.
- smallmancontrov 3y agoAlso, perverse incentives arise spontaneously all the time. Business types love talking about this, they will talk your ear off about it, but only from the angle that looks to exploit them as tactics or strategic moats with studiously suppressed consideration for the first order effects let alone second or third. If you so much as hint that you think maybe there ought to be a countervailing force somewhere, suddenly COBRA EFFECT HOW DARE YOU COMMUNIST CENTRAL PLANNING ECONOMIC ILLITERATE FILTH! It leaves me with the distinct impression that nobody really believes in the system, let alone "warts and all," and instead just grabs the nearest self-serving principle off the shelf to rationalize whatever they want to do.
- rob74 3y ago> I heard a story from a friend in South Africa that their town had legalized the hunting of endangered rhinoceroses. This sounds like a shockingly bad idea. [...] There are more examples like this. [...] Sex education reduces incidences of teen pregnancy. After initially being confused, this reminded me that there are still people who consider sex education to be a "shockingly bad idea". And that made me sad...
- mhb 3y agoWhy is that a clever idea? If you can make the landowners pay a fee when a rhino gets killed on their land, why not just make them pay a fine instead? But, it's South Africa so the thinking there seems a little muddled recently.
- FrustratedMonky 3y agoMight be human nature. Fee. People will pay huge 'fees' for some feature or access, or privilege. Fine. People will riot in the streets if the exact same value was applied as a fine or a tax. 'what a huge fine, that is totally un-fair'. A fee makes it seem like a choice. A fine, everyone is mad, even people that it wont ever apply too.
- IggleSniggle 3y agoPlus, a fee has an element of conspicuous consumption to it, where people are proud to pay the fee (if they value the thing), and will simply avoid it if they don't care about the thing.
- yaky 3y agoAnecdote from my old job: Management issued a directive that there should be "no failed sprints". Teams started either putting 1-3 small tickets on the sprint, or filling the sprint with tickets which have already been technically completed (during the previous sprint, naturally). Any difficult or complex tickets were simply not placed on a sprint until they were figured out.
- DenisM 3y agoDid that work out well for the business? Maybe that’s what they wanted? It’s a serious question.
- feoren 3y agoHas anyone else experienced that perverse incentives are extremely hard to get anyone to listen to you about? I find myself saying the words "but then people will be incentivized to ..." surprisingly often, and it's almost always dismissed as some irrelevant academic argument. Incentives really genuinely can drive behavior in a big way, and you really genuinely can predict some perverse incentives ahead of time, but even asking to talk through what those incentives might be for some new decision just gets total dismissal, like I'm talking about auras and astrology. What gives?
- AlbertCory 3y agoYou are absolutely right. Good intentions are not enough. We should all keep repeating this at the tops of our voices.
- 6gvONxR4sf7o 3y agoIt's super frustrating! Someone says, "Something needs to be done about this problem, and X is something, so X needs to be done." Then if you say X will backfire, you're taken as supporting the problem. It's a real rhetoric challenge.
- godelski 3y agoQuite frequently. Personally, I think part of the issue is explicit vs implicit noise in the system. There's always noise in the system, so there is always reasons to reject or criticize something. Very few things have unobjectionable global optima. But if noise is explicit in the system, people tend to take a bit more care. If it is implicit, well people act like the metric is doing exactly what it is intended to do and can't be hacked. Momentum is a pretty powerful force. [Edit]: I thought I'd add a clear example because I was reminded of it. When I tell people that return free filing taxes could really simplify taxes for people at first agree and then start pointing out a bunch of edge cases. So I argue that if we could just get the 15 million Americans who use the 1040 EZ then that's a big step in the right direction. It never goes well and it is never considered that just autofilling everything you normally put in by hand significantly reduces time regardless of how you do your taxes. Maybe I'm just bad at making cases, maybe people are hard of hearing, maybe both. (this is not the argument I make in full, obviously)
- zackmorris 3y agoThis article sums up the biggest problem with politics. Rather than just trying various policies in simulation, we argue about them dogmatically until the end of time. After a lifetime of witnessing tax cuts grow wealth inequality and burden the poor and middle classes, I view people in favor of them with concern. I wonder if they're able to extrapolate cause and effect to understand the ramifications of their choices. And they look at me the same way, I imagine as an astonishing waste of potential since I'm apparently miserable all the time and unable to cope with a world that wasn't designed for me, when I could just conform and be wealthy and successful. I don't know what to say to that, because I'm not sure that either of us is wrong. We can get mad about this stuff and pout and refuse to cooperate, but it reminds me of the scene in the Matrix when Neo is faced with saving humanity or the one he loves. The logical choice often isn't the right one, because consciousness and free will can tap into higher-level aspects of reality that transcend logic via intuition and emotions like love.
- feoren 3y ago> Rather than just trying various policies in simulation, we argue about them dogmatically until the end of time. That may be because what people argue about is very often not what they actually care about, because what they care about is outside the Overton window. You can't really argue that we should just harm black people for being black in order to make miserable white people feel a little better about their lives in comparison, so instead you argue about drug laws and being "tough on crime". You can't really argue that the poor and sick should just die on the streets (although this did get an applause at a Republican convention) so instead you argue about people taking advantage of the welfare system. You can't really argue that men should have utter dominion over women, so you instead argue about killing unborn babies. These things move the Overton window in the direction you want, so that next time you can argue the more extreme version. Who would want to simulate these things? That would just open up the possibility of being proven wrong. Wrong or right has nothing to do with it: they just want to hurt and control people. > After a lifetime of witnessing tax cuts grow wealth inequality and burden the poor and middle classes, I view people in favor of them with concern. I wonder if they're able to extrapolate cause and effect to understand the ramifications of their choices. But they know that tax cuts grow wealth inequality. That's what they want. > And they look at me the same way, I imagine as an astonishing waste of potential They don't look at you at all, unless they think they can make a caricature of you to parade on the news and use as a straw-man punching bag. Otherwise they barely know or care that you exist at all. They certainly don't give a shit about your "potential". Obviously everyone knows exactly which half of people I'm talking about.
- swalling 3y agoMore recently, this exact effect caused the spread of invasive feral hogs in the United States. States allowed unlimited hunting of feral hogs, which generated companies doing guided hunts, and then... "hog hunting became so popular that vehicles were used to transport feral hogs to new locations to provide additional hunting opportunities (this practice is now regulated ). These transportation efforts allowed independent populations to pop up all over the map and greatly expedited the range expansion of this species." https://feralhogs.tamu.edu/introduction-of-feral-hogs-to-texas/ https://feralhogs.tamu.edu/introduction-of-feral-hogs-to-tex...