from Hacker News

Incentives and the Cobra Effect

by momentmaker on 2/6/24, 5:35 PM with 38 comments

  • by kulor on 2/8/24, 11:12 AM

    An anecdote from our early per-seat pricing model is that we kept running into odd customer service issues that after lots of digging kept coming back to users sharing login details (to avoid paying for extra seats).

    Without getting into details, a lot of the value of our platform is derived from having discreet users connected to an organization.

    Rather than restricting or trying to educate people not to share accounts, we changed the pricing structure to a flat subscription which almost comically led to an explosion in new user account creation. This led to our customers getting the full intended value which led to a big reduction in churn and an increase in WoM referrals.

  • by feoren on 2/8/24, 5:42 PM

    Has anyone else experienced that perverse incentives are extremely hard to get anyone to listen to you about? I find myself saying the words "but then people will be incentivized to ..." surprisingly often, and it's almost always dismissed as some irrelevant academic argument. Incentives really genuinely can drive behavior in a big way, and you really genuinely can predict some perverse incentives ahead of time, but even asking to talk through what those incentives might be for some new decision just gets total dismissal, like I'm talking about auras and astrology. What gives?

  • by yaky on 2/8/24, 4:31 PM

    Anecdote from my old job:

    Management issued a directive that there should be "no failed sprints". Teams started either putting 1-3 small tickets on the sprint, or filling the sprint with tickets which have already been technically completed (during the previous sprint, naturally). Any difficult or complex tickets were simply not placed on a sprint until they were figured out.

  • by yoz on 2/8/24, 10:42 AM

    For a hilarious short story about the Cobra Effect taken to extremes, check out Julian Gough's "The Great Hargeisa Goat Bubble": https://thefinanser.com/2009/05/the-great-hargeisa-goat-bubb...

  • by zackmorris on 2/8/24, 6:52 PM

    This article sums up the biggest problem with politics. Rather than just trying various policies in simulation, we argue about them dogmatically until the end of time.

    After a lifetime of witnessing tax cuts grow wealth inequality and burden the poor and middle classes, I view people in favor of them with concern. I wonder if they're able to extrapolate cause and effect to understand the ramifications of their choices. And they look at me the same way, I imagine as an astonishing waste of potential since I'm apparently miserable all the time and unable to cope with a world that wasn't designed for me, when I could just conform and be wealthy and successful. I don't know what to say to that, because I'm not sure that either of us is wrong.

    We can get mad about this stuff and pout and refuse to cooperate, but it reminds me of the scene in the Matrix when Neo is faced with saving humanity or the one he loves. The logical choice often isn't the right one, because consciousness and free will can tap into higher-level aspects of reality that transcend logic via intuition and emotions like love.

  • by mihaic on 2/8/24, 1:16 PM

    While this story was initially against the hubris of controlling a complex system through incentives, since second or third order effect are hard to predict, I think over time the takeaway has degenerated into "you can't have any centrally pushed incentives".

    Not sure when the aim to strike a balance was lost.

  • by swalling on 2/8/24, 8:47 PM

    More recently, this exact effect caused the spread of invasive feral hogs in the United States. States allowed unlimited hunting of feral hogs, which generated companies doing guided hunts, and then...

    "hog hunting became so popular that vehicles were used to transport feral hogs to new locations to provide additional hunting opportunities (this practice is now regulated ). These transportation efforts allowed independent populations to pop up all over the map and greatly expedited the range expansion of this species."

    https://feralhogs.tamu.edu/introduction-of-feral-hogs-to-tex...

  • by rob74 on 2/8/24, 2:17 PM

    > I heard a story from a friend in South Africa that their town had legalized the hunting of endangered rhinoceroses. This sounds like a shockingly bad idea. [...] There are more examples like this. [...] Sex education reduces incidences of teen pregnancy.

    After initially being confused, this reminded me that there are still people who consider sex education to be a "shockingly bad idea". And that made me sad...

  • by RcouF1uZ4gsC on 2/8/24, 11:53 AM

    Is the Cobra effect story true or is it a racist British/Western trope “Look how devious and greedy the Indians/natives are, even when we are trying to make their lives better?”

    Can you really breed Indian cobras in a home in captivity? Cobras are very good hunters and trying to keep them confined (remember how they are freed at the end of the story) and feed a growing population yourself is likely to take some time and effort, perhaps money that might not be worth the bounty?