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The rule that made the cobra problem worse
💡 People optimize for the reward you actually offer, not the outcome you intended — so a poorly-targeted incentive can amplify the very problem it was meant to solve.
In colonial Delhi, British officials worried about venomous cobras offered a bounty: bring in a dead cobra, get paid. It worked — at first. Then enterprising locals started breeding cobras just to kill them and collect the reward. When the government discovered this and scrapped the bounty, the breeders released their now-worthless snakes. Delhi ended up with more cobras than before. Economists call this the cobra effect: a solution that makes the exact problem it targets worse.
The deeper lesson is about perverse incentives. People don't respond to what you want them to do — they respond to what you actually reward. The bounty was meant to reward fewer snakes, but it literally paid for dead snakes, so it rewarded snake production. Whenever a metric becomes a target, humans optimize for the metric, not the underlying goal.
This shows up everywhere: paying software teams per bug fixed can encourage sloppy code that generates bugs; rewarding a fossil-hunting site per bone fragment led workers to smash whole fossils into pieces. The failure isn't laziness or malice — it's a rational response to a badly designed rule. Good incentive design asks not "what do I want?" but "what will a clever, self-interested person do to maximize this exact reward?"