The Cobra Effect: What could possibly go wrong?
I’ve always been fascinated by the Cobra Effect. As a marketeer who works with clients to change perceptions around brands or products, understanding human behaviour is essential. But people are unpredictable and often things that should logically pan out can backfire in a big way. Last month, in the UK, a leaked memo suggested the Government were considering paying £500 for a person to self isolate with COVID symptoms, irrespective of their income. Enforcing self-isolation is near impossible, So it’s easy to see why it could make sense to offer a financial incentive to stay at home if you have been in contact with someone with COVID. But before the UK plunges deeper into COVID debt, let’s consider the snakes.
The Cobra effect occurs when incentives designed to solve a problem end up rewarding people for making it worse. The term originated in an anecdote that describes an occurrence in India under British rule. The British government was so concerned about the number of venomous cobras in Delhi it offered a bounty for every dead cobra. Initially, this was a successful strategy and large numbers of snakes were killed for the reward. However, unscrupulous entrepreneurs began to breed cobras. When the government became aware of this money making exercise, the programme was scrapped, leaving cobra breeders with thousands of worthless snakes which they then freed, thus increasing the wild cobra population.
Similar events have occurred with rats in Vietnam, feral pigs in Georgia, a gun buyback scheme in California as well as environmental incentives. Credits for the destruction of a damaging coolant HFC-23 were finally suspended in the European Union in 2013 after companies started to produce the damaging gas to collect millions of dollars in carbon credits.
