How Good People With Good Intentions Unintentionally End Up Messing Things
I was 10 or 11 years old. Resting on the lap of my grandmother on a sunny day in the summer vacations, I watched a Kannada movie. I had no other option but to give her company. Afternoons were reserved for her movie-watching.
I cannot recall the movie name, but here’s the summary. Parents are the lead actress and actor of the movie. The father is strict, disciplined and principled. Mother is lenient, understanding and favourite of all.
The kid is mischievous and father discounts his behaviour initially. When the kid behaves rudely with others, father scolds him. And then the kid does more such acts and father beats him up. Mother intervenes from the ire of her husband and protects the son. She continues showering care and love, ignoring the mistakes he makes for being a child. As the child grows up, he soon resorts to drugs and drinks. He conspires his father’s murder for wealth.
When the mother discovers the hatch, she is aghast! She is shocked and is filled with inconsolable grief. She had only set to shield him from his father’s ire and instead, he developed hatred to the extent of murdering him. She questions herself- where did I go wrong?
I know the answer now- love for the son turned out to be a perverse incentive.
A perverse incentive is an incentive that has an unintended and undesirable result which is contrary to the interests of the incentive makers. Perverse incentives are a type of negative unintended consequence or cobra effect.
Did you notice the last phrase- cobra effect? The name of the effect comes from India. Both stories have an Indian connection.
When the Brits came to India, they were terrified with the landscape. Because there were cobras everywhere. And the fear of snakes is evolutionary because learning to avoid snake bites helped to survive and reproduce. They devised a plan- announced monetary rewards to whosoever finds and brings a cobra to them.
It worked! Indians caught and brought them snakes which were then killed. The population of snakes decreased significantly. For then.
The Brits hoped snakes would be extinct. They weren’t. Indians kept bringing them regularly. They found it fishy and hence probed. It was then revealed that many Indians had started to breed cobras so as to maintain a constant source of income.
The scheme was immediately rolled back (like Modi’s overnight demonetization decision). The valuable cobras and their eggs now had a value of Zero.
The intention (to reduce the number of cobras) gave rise to an unintended act (breeding cobras) and resulted in a negative unintended consequence!
Similarly, renowned and intelligent people fall for it too. Take this gentleman R von Koenigswald, a paleontologist who tried to play smart by designing a scheme for Javanes locals. For every homonid bones they get, he would pay them money. Later he realised the locals broke down large bones and supplied him only pieces!
And policy-making is probably affected the most. Look at the below story:
Awarding carbon credits for destroying the greenhouse gas HFC-23 incentivized increased manufacture of the refrigerant HCFC-22 (chlorodifluoromethane) whose production included HFC-23 as a by-product. This increased production caused the price of the refrigerant to decrease significantly, incentivizing refrigeration companies to continue using it, despite the adverse environmental effects.
How does this relate to us?
#1 Consider you measure the success of your product on downloads, and you brief your partners on the same. The unintended consequence is you have least active users of the app!
#2 Likewise, going by the fad if the number of views on your latest TVC or digital video matters the most, then you might end up having loads of views from countries like Nigeria, Uganda or wherever there are bot-farms or for a 2 minutes video you might end up having 1 million views but 95% of them are just 3 seconds and the drop off is also 95% from then!
FYI- Facebook is going to hide the number of post likes for others Australia. Since likes is a vanity metric, several youngsters are facing mental health issues along with online bullying!
#3 Google ads pay you on the basis of ads served on your page (cost per thousand impressions). It doesn’t care how you get the visitors it just needs them.
Unintended consequence: clickbait headlines, fake news, sleazy pictures, slide-shows, create more content so as to attract visitors and so on.
#4 Political rallies are always full. The objective of the party and politician is to show strength for the media to cover. They don’t care if people find any worth of attending. The party workers pay people, promise two-time meals, free transport and booze. People find an easy source of income and pleasure, that in turn attracts them to plead not-work and feed off on such incomes.
What’s the takeaway?
- One of the reasons why India’s Mars mission was successful was that they sat and wrote 250 reasons why the mission would fail! I am sure the process might have led to figuring out unintended consequences. So, be alert.
- When you set a measure for target, then keep an eye on where and in what form might unintended things might spring up in an attempt to reach the target. (Goodhart’s Law: when a measure becomes a target, it ceases to be a good measure)
- Work backwards: The cause and effect. The effect might be a perverse incentive. You should find what’s causing it.
