Saturday, January 18, 2020

How the Cobra Effect came to be


Image result for cobra
The "Cobra Effect" story is a popular economic anecdote relating to when India was under British colonial rule. Officials from the British government were concerned with the large population of cobras in Delhi, so they created an incentives program that rewarded hunters for bringing in dead cobras. Some, seeing the program as an easy way to get rich, started to breed cobras for the program. Understandably, the British government was not happy to find out that they were being taken advantage of, so they ended the program.

But what happened to the cobras in captivity? Well, seeing as there was no use in keeping venomous snakes around, the breeders set them free, thereby increasing the number of cobras in the wild. While this story is only anecdotal, people have been taking advantage of the "Cobra Effect" throughout history.

In 1897, Hanoi was under French colonial rule. The French modernized Indochina with new age infrastructure, with the most notable improvement being a functional sewer system. However, that sewer system also meant the rats who normally had to hide away in dark alleys and trash heaps now had a safe highway to scurry into. Concerned with the spread of bubonic plague, the French government employed a similar program to the British. They employed Vietnamese rat hunters to kill the rats. Proof would be submitted through dismembered rat tails.

The rat hunters, realizing that outright killing the rats would not generate the most money, took advantage of the system. They started to amputate the tails, so that the tailless rats could reproduce and breed more rats. Some Vietnamese followed their Indian counterparts, breeding rats so that their tails could be farmed. Just like with the British, the French ended the program.

People will always take advantage of incentives, it is only a question of if the benefits of the incentives (for example, compensating people for weight loss) outweigh the "cobra effect" (people intentionally bulking and then slimming down).


Sources:
https://economictimes.indiatimes.com/markets/stocks/news/heard-of-cobra-effect-be-careful-what-you-ask-for/articleshow/60866402.cms?from=mdr
https://www.atlasobscura.com/articles/hanoi-rat-massacre-1902

6 comments:

  1. This reminds me of the Belgian Congo, where for every bullet the natives used, they had to bring back their dead victim's cut-off hand. This was the Belgians' way to ensure that the natives weren't wasting their bullets. If they didn't bring back the hand, they would be severely punished. As a result, when they missed a shot, to save themselves from being punished, they started to cut off hands from people who were alive.

    This is similar to this article because it proves that incentives don't always work. People find a way to get around it.

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  2. Although this does not directly fit the Cobra Effect, the Yellowstone gray wolves situation is another result of how financial incentives can cause inadvertent damage. In that situation, farmers who considered wolves a threat to their livestock, were financially motivated to hunt gray wolves to extinction. The government did not do anything about this because farmers producing more livestock is good for the economy. In doing so, Yellowstone's ecosystem experienced negative ecological impacts as the elk populations became unchecked. This led to the spending of much more money to control elk populations. Much like in the cobra story, the lack of considering the long term outcomes of policies created a situation that led to problems that were worse than the original problem.

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  3. This is really interesting because even when the a policy seems like there would be an easy way to use the cobra effect, it is not always immediate. Even after reading your post, I was still wondering why someone would use the cobra effect for weight loss because the idea of intentionally overeating and creating health challenges just seems so weird to me. How do people decide if the effect is worth the future costs?

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  4. This is very interesting, and I appreciate that you shared a historical story to better an example of how this anecdote was used. I wonder what a less direct, yet more relatable example of this would be.

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  5. I'm assuming that these rewards programs were all monetary, which brings me to my question of "is money even a good incentive?" We saw that it only semi-worked with the UChicago study; and in these examples, it created new problems. How can we use the right incentives to solve problems? With climate change, many people understand that it's a threat to our world and to the people living in it. But part of the reason it continues to get worse is because politicians see rising sea levels as opportunities. Especially in the North Pole, lesser ice caps means easier transportation of goods.

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    1. I think money is a good incentive to those who actually need it. It's important to note that the reason people *need* money is so they can afford the basic needs for survival (paying for rent [shelter], and buying food and water). If the incentive became "if you bring us dead cobras, we'll give you food and water. if you don't then you starve to death", then of course people will be incentivized because the cost of not bringing cobras is their life. When people have other ways of providing for themselves, then money becomes a worse incentive because they know they could go without it (think of Kevin from the documentary; his parents paid for his food and provided him with a house, which is why he didn't prioritize the 50 dollars per month as much as he would have if he lived on his own).

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