Sunday, September 13, 2020

Unintended Consequences

I have heard stories of unintended consequences.

Here is the first one I heard from Madhu Sudan Padhi. During the time when British were ruling India, at one time, there was a problem of snakes in Delhi. They debated a for a solution. The solution they arrived at was crowd sourcing. Give incentive for catching a snake. Later they observed that too many snakes are caught. On investigation it was found that people are breeding snakes to claim incentive. The solution has the exact opposite effect of increasing the problem. It has a name now called the Cobra effect.

https://en.wikipedia.org/wiki/Cobra_effect

Here is one more. In the past, the banks will staple currency notes in bundles of 100. The problem was that the notes were damaged in the process. RBI came with a notification to stop this practice. Tata Steel found that they had a revenue loss of a few crores as the demand for staple pins dropped. RBI certainly did not intend to harm the steel industry through this notification.

Here is the last one. The Demonization in 2016 was meant to wipe out black money from the economy. But it ended up harming the real economy. Whether black money was eliminated remains debatable.

I was surprised to see a website on Unintended Consequences. http://ucstories.com/

Any action from me or us has consequences and sometime it is unintended. We often score a self-goal in the process. One needs to game our decisions to see its consequences on oneself and others,


No comments: