Have you ever tried to simplify a problem only to make things worse? This phenomenon is called the Cobra Effect - when a solution results in the problem getting worse through unintended consequences. The term comes from the British colonial era in India. There was a growing number of venomous snakes in Delhi (the capital) that worried the colonial officials. To mitigate the issue, they came up with a brilliant plan of offering a bounty for every dead cobra that was delivered to them. Although the plan initially resulted in the reduction of the number of snakes observed in the city, oddly, the number of dead cobras presented to the bounty office for the reward kept rising. As it turned out, resourceful individuals had started breeding snakes to get the bounty. When the government became aware of the scheme they stopped, forcing the cobra breeders to set the now “worthless” animals free. The net result of the solution was a significant increase in the cobra population. While this historic anecdote might be hilarious, it points to how setting up misguided incentives within a complex system leads to exacerbation of the problem one might be attempting to solve.
Well said.