Perverse incentives

Perverse incentives are incentives that have unintended, negative effects that are contrary to the intention of their designers. The ‘cobra effect’ is famous; the British government, concerned about the number of venomous cobras in Delhi, offered a bounty for every dead cobra. Initially, this was a success and large numbers of snakes were killed for the reward. Eventually, however, enterprisingContinue reading “Perverse incentives”