With physicians, world destroying CEOs, Texas teachers and every salesman since the dawn of commerce, Goodhart's Law says you get the behaviors you measure and incent.
Turns out the same thing is true of 9yo girls.
My daughter's 3rd grade class has an "advanced reading" program. Each book read earns points; the "harder" the book, the more the points. This means that weak readers get discouraged fast. Keen competitors though, can wrack up the points.
That includes my girl. She's reading day and night to beat the 5th and 6th grade girls.
Problem is, she doesn't need to practice reading. Math yes, soccer sure, playing with her friends is fine too -- but we done got 'nuff readin.
Incentive programs always have perverse consequences.
And of course, a major cause of the financial crisis is that mortgage brokers were paid much higher commissions for making horrible loans with high interest rates than sane loans at sane interest rates. Of course if the regulators had been doing their jobs, companies making the horrible loans would have been penalized. But the regulators didn't have any incentive to do their jobs...
Post a Comment