Perverse Incentives

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When people try to affect change without a pragmatic understanding of human nature, they can create an incentive system that causes the problem to get worse through Perverse Incentives. A famous example of this is the “Cobra Affect”. Politicians in India wanted to reduce the cobra population so they put a bounty on cobra tails. This led a tiny portion of Indian Entrepreneurs to breed cobras and cause the problem to get worse for everyone else.

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