🐍The Cobra effect: When an incentive backfires

Unintended consequences: life, and economics, are full of them. The cobra effect is a specific kind of unintended consequence that happens when the proposed solution ends up worsening the problem it was intended to solve. It’s not simply a surprise negative result, it’s the opposite of what was intended. Coined by German economist Horst Siebert in his [2001 book of the same name]( the cobra effect is often the result of incentive policies gone haywire—the phenomenon is also described by the equally juicy term “[perverse incentives]( The cobra effect highlights the limitations of linear thinking, and what happens when we underestimate the complexity of a system—or of human motivations. Let’ssssss take a look. 🐦 [Tweet this!]( 🌐 [View this email on the web]( [Quartz Obsession] The cobra effect October 11, 2019 Linear thinking fails --------------------------------------------------------------- Unintended consequences: life, and economics, are full of them. The cobra effect is a specific kind of unintended consequence that happens when the proposed solution ends up worsening the problem it was intended to solve. It’s not simply a surprise negative result, it’s the opposite of what was intended. Coined by German economist Horst Siebert in his [2001 book of the same name]( the cobra effect is often the result of incentive policies gone haywire—the phenomenon is also described by the equally juicy term “[perverse incentives]( The cobra effect highlights the limitations of linear thinking, and what happens when we underestimate the complexity of a system—or of human motivations. Let’ssssss take a look. 🐦 [Tweet this!]( 🌐 [View this email on the web]( By the digits [$40:]( Per-tail bounty on feral pigs in Fort Benning, Georgia [1,000:]( Estimated feral pig population in Fort Benning when the bounty was put in place [>1,500:]( Pigtails that were brought in for bounty [62%:]( Driving time spent without a passenger for ridesharing services [5.7 billion:]( Increase in vehicle miles over six years in nine US metro areas due to ridesharing [$2.8 billion:]( Cost to make the 26-lane Katy Freeway in Houston, Texas the widest freeway in North America [55%:]( Increase in evening commute times after the Katy Freeway was expanded [30 minutes:]( Time before the victim of a cobra bite may stop breathing [50,000:]( Estimated number of snakebite deaths in India each year [10 cents:]( Bounty per cane toad proposed by Pauline Hanson, an Australian politician Giphy Origin story Got 99 problems, and most of them are cobras --------------------------------------------------------------- The term cobra effect was born from an anecdote from British colonial rule in India. The British governor of Delhi set out to reduce the city’s large cobra population, and the lethal bites that went along with it. The plan? [Set a bounty on cobras](. The city collected large numbers of dead cobras, yet the streets were still a-slither. Turns out, people were farming cobras for a steady stream of income from cobras bounties. Smart! Once the government got wise to the cobra farming scheme, they ended the bounty program, which created the true cobra effect. Now that they were stuck with a bunch of worthless and potentially deadly snakes, the farmers simply released the cobras. Delhi’s snake problems were worse than ever—it wasn’t just an ineffective policy, the Delhi cobra bounty disastrously compounded the problem. That is the cobra effect. A similar fiasco took place under French rule in Hanoi, but [swap rats for cobras](. Quotable “So when you introduce an incentive scheme, you have to just admit to yourself that no matter how clever you think you are, there’s a pretty good chance that someone far more clever than yourself will figure out a way to beat the incentive scheme.” —Steve Levitt for [Freakonomics]( Reuters Which of the following is not true about king cobras? Their genome has been sequencedTheir venom is a neurotoxin powerful enough to kill an elephant with one biteThey mostly eat other snakesThey're nocturnal Correct. King cobras are diurnal—mostly active during the day Incorrect. Nope, that's true If your inbox doesn’t support this quiz, find the solution at bottom of email. 🐍effects in history [1902:]( French-occupied Hanoi attempts to reduce the rat population in its newly-built sewer system with a bounty on tails. Enterprising locals cut the tails from rats and set them free to breed and create more tails. Some also breed their own rats. When the bounty ends, those rats are released, further increasing the rodent population in Hanoi. [1958:]( Mao Zedong creates the “Four Pests” campaign in China to remove mosquitoes, rodents, flies, and sparrows responsible for the transmission of disease. The [policy wipes out sparrows but also becomes a contributor to the Great Chinese Famine]( the absence of sparrows led to insect infestation and massive crop loss. [1989:]( To curb air pollution, Mexico City creates a car-rationing policy based on license plate numbers, which residents circumvent by buying more cars with different license plates. A flood of cheap cars makes the problem worse. [1998:]( Bogota, Colombia bans certain cars from driving, based on license plate numbers, on certain days of the week. They attempt to improve on the Mexico City initiative, by switching the combinations of days and license plate numbers each year. Colombians figure out ways to circumvent the rule by driving during off-peak hours, which [causes major pollutant concentrations to worsen]( because driving increases overall. [2005:]( The UN Intergovernmental Panel on Climate Change creates a carbon credit program for properly disposing of polluting gases. Companies ramp up coolant production to create the gas HFC-23, an extremely polluting byproduct, to cash in on the credits. The [coolant itself is bad for the environment]( as well. [2007:]( Fort Benning, Georgia creates the Pig Eradication Program to reduce the feral pig population. Locals allegedly buy pig tails in bulk from butchers to collect the bounty; [the hog population grows,]( possibly because of food set out to lure pigs. [2019:]( Australian senator Pauline Hanson proposes a “cash for cane toads” scheme that would pay a bounty on the toxic, invasive species. AP Photo/New Zealand Herald, John Stone The way we 🐍 now In 2016, New Zealand unveiled Predator Free 2050, an ambitious plan to eliminate rats, possums, and stoats from the island nation in just under 35 years. New Zealand’s native bird population, including the eponymous kiwi, has been decimated by these non-native predators. Bounties are not a part of the plan, which has employed a combination of poison bait, trapping, fences, and is investing heavily in research to exterminate the predators in remote areas. The campaign [seems to be working]( thanks to government funding of large-scale programs, as well as grassroots organizations getting behind the movement. Overall, the government has drawn on pride in the country’s incredible natural diversity to foster support. “In Wellington [the capital] there is now not a suburb within the city that doesn’t have a predator-free community, and that’s pretty massive,” Jessi Morgan from the Predator Free New Zealand Trust [told the BBC](. There are more than 150 small islands that have also been declared predator-free. Have a friend who would enjoy our Obsession with The cobra effect? [ [Forward link to a friend](mailto:?subject=Thought you'd enjoy.&body=Read this Quartz Obsession email – to the email – YouTube Watch this! A different kind of cobra --------------------------------------------------------------- The 1986 Sylvester Stallone movie Cobra is full of unintended consequences, mostly hapless criminals who never thought they’d go head-to-head with a cop like Marion Cobretti. Watch the trailer. Explain it like I'm 5! Systems thinking --------------------------------------------------------------- Linear thinking, basically cause and effect, is one of the most fundamental ways we grasp the world. Chop the head off of a cobra and it dies. Chop the heads off of two cobras and you have two fewer cobras. Much of the world though, [is not linear]( a bounty on cobras and you may well end up with more cobras. In dynamic systems, there are two basic types of feedback: reinforcing feedback, which keeps a desired effect going, and balancing feedback, which keeps the system in a state of homeostasis. The systems theory version of the cobra effect is called a Fixes that Fail feedback structure. “This archetype captures the common tendency of decision makers, when faced with a problem, to apply a ‘fix’ that reduces the strength of the problem,” Barry Newell and Christopher Doll [write for the United Nations University](. “While it seems to work in the first instance, the fix fails in the long run because it has an unexpected outcome that amplifies the problem.” The classic example of a fix that fails is relieving road congestion by building bigger roads. Traffic eases at first, but then, because driving is more pleasant when roads are less congested, more people drive, and the cycle starts again. take me down this 🐰 hole! The cobra effect, but make it celebrities --------------------------------------------------------------- The [Streisand effect]( is when the act of trying to make something private calls more attention to it. In 2003, [Barbra Streisand sued the California Coastal Records Project,]( which had taken aerial photos of her mansion in Malibu and made them public online. This wasn’t a paparazzi situation though—the group documents the coastline for scientific study, and the CCRP’s archives were obscure to anyone not in the business of tracking beachfront erosion in California. Prior to the suit the photos had been viewed six times. Once Streisand filed, claiming invasion of privacy, [there were millions of views](. She also lost the lawsuit and [was ordered to pay $177,000 to cover legal fees]( for the CCRP. Reuters/Tim Wimborne Poll If you had to farm them, which would you choose? [Click here to vote]( Cane toadsCobrasRatsMongooses 💬let's talk! In yesterday’s poll about [escape rooms]( 33% said you’ve tried it and “sign me up for the next!”; 26% said “no, but I want to!” 🤔 [What did you think of today’s email?](mailto:obsession%2Bfeedback@qz.com?cc=&subject=Thoughts%20about%20The%20cobra%20effect&body=) 💡 [What should we obsess over next?](mailto:obsession%2Bideas@qz.com?cc=&subject=Obsess%20over%20this%20next.&body=) [🎲 Show me a random Obsession]( Today’s email was written by [Stevie Borrello]( ([@stevie_borrello]( edited by [Annaliese Griffin]( and produced by [Whet Moser](. The correct answer to the quiz is They're nocturnal. Enjoying the Quartz Obsession? [Send this link]( to a friend! Want to advertise in the Quartz Obsession? Send us an email at ads@qz.com. Not enjoying it? No worries. [Click here]( to unsubscribe. Quartz | 675 Avenue of the Americas, 4th Fl | New York, NY 10011 | United States [Share this email](