Perverse incentive

incentive that has an unintended and undesirable result that is contrary to the intentions of its designers

A perverse incentive is an incentive that creates an unplanned and unwanted result. The outcome is not helpful or contrary to the interests of the incentive makers. Perverse incentives are a type of unintended consequences.

Select examplesEdit

  • In India, the southern provinces had the problem of too many snakes. The government tried to solve the problem by paying for dead cobras. This was intended to bring down the number of cobras. Instead, it led to the breeding of cobras.[1]
  • In Thailand, the Bangkok police had the problem of too many small mistakes by its officers. The police tried to solve the problem by using tartan armbands as a badge of shame. Instead, the armbands were treated as valuable collectables. Since 2007, the Bangkok police has tried using pink armbands with the cute Hello Kitty cartoon character.[2]
  • In Vietnam during the colonial period, Hanoi had the problem of too many rats. The French tried to solve the problem by paying for dead rats. This was intended to bring down the number of rats. Instead, it led to the breeding of rats.[3]

Related pagesEdit

ReferencesEdit

  1. Brickman, Leslie H. (2002). Preparing the 21st Century Church, p. 326.
  2. Myndans, Seth. "Cute Kitty Is Pink Badge of Shame in Bangkok," New York Times, August 25, 2007; retrieved 2012-6-23.
  3. Michael G. Vann, "Of Rats, Rice, and Race: The Great Hanoi Rat Massacre, an Episode in French Colonial History," Archived 2016-03-29 at the Wayback Machine French Colonial History, Vol. 4, 2003. pp. 191-203. doi:10.1353/fch.2003.0027; retrieved 2012-6-23.