Insight of the Week The Cobra Strike of Unintended Consquences

The Cobra Strike of Unintended Consequences

by Peter Temes, Founder & President of ILO

Large organizations often create incentives for exactly the opposite of their goals. The Law of Unintended Consequences explains how and why this often happens, brilliantly explained by our friends at the Farnam Street blog – The Law of Unintended Consequences: Shakespeare, Cobra Breeding, and a Tower in Pisa.

Take the case of the cobra. Too many cobras in your nation? Offer a bounty for dead cobras. A festival of cobra-killing should follow, and soon enough, no more cobras. And yet. .  . with a high bounty set in a poor country, paid by a colonial occupier, too many folks decide that this is the perfect way to pay the rent and feed the family on the occupier’s dime. So they start breeding cobras, and more rather than fewer cobras fill the streets.

How much time and energy do you spend gaming out how your incentives might go wrong? Chances are, not enough.