If not, it's time you learn about it.
The Cobra Effect is a term in economics. It refers to a situation when an attempted solution to a problem makes the problem worse.
The name was coined based on an incident in colonial India.
For some reason, there were too many venomous cobra snakes in Delhi. People were dying due to snake bites and it became scary for almost everyone to step out of their houses.
The government of the day had to get into action to stop this menace and it offered a silver coin for every dead cobra. The results were great, a large number of snakes were killed for the reward.
Eventually, however, it led to some serious unwanted consequences. After a short-term dip in cobra population, it started going up.
This was because a few people began to breed cobras for the income. When the news reached the government, the reward programme was scrapped, causing the cobra breeders to set the now-worthless snakes free. As a result, the cobra population further increased. The solution for the problem made the situation even worse.
The unintended consequence for a well-intention-ed ideacled to making the problem worse.
Trying a new solution?
or
Planning to tackle an existing problem with a new idea?
Well, it's time to pause and think about how people would respond to the new idea that may sound great on paper!
Specially, the solutions that try to affect people who have a tendency to game the system - intentionally or otherwise.
They have a tendency to take short-term advantage of any situation though that may lead to harm to them and society-at-large only in the long run.
Every solution has consequences and those consequences may lead to certain situations where rather than solving a current problem, you may end up with more complex problems.
A few more examples.
* A similsr type of incident like increasing cobra-population occurred in Vietnam. The rulers
realised that there were too many rats in Hanoi and the spread of plague was imminent. They
created a reward programme that paid a prize for each rat killed. To obtain the bounty, people
would provide the severed rat tail. After initial success, the officials, however, started noticing
rats with no tails. The rat catchers would capture rats, cut off their tails and then release them back
into the sewers so that they could breed and produce more rats, thereby increasing their profits.
As they say the road to hell is paved with good intentions, similar mistakes are happening around us everyday when the decision-makers fail to take a 360 degree view of all the outcomes of an action, before implementation.
* Some time ago, Philadelphia in the US passed a "soda" tax - a US $1 tax on a typical 2-litre bottle of soft-drink - as a "sin tax - in the national war on obesity. But the natives didn't cut calories as a result of the tax on sweetened drinks, nor was there a shift towards any healthier option. Instead, most of them just drove outside the city to buy the same colas, from stores where they didn't have to pay the tax. But the poor paid more as they could not find it affordable to drive out of the city to buy their drinks. In the end, the city suffered loss of revenue due to lower sales whereas the lower section of society paid more.
* The Nano Car - a small car that could never make it big!
A car considered as a brilliant product, launched in a segment having a billion dollar opportunity. Hopes ran high, the company expected expected all present and potential two-wheeler owners would shift to Nano.
But they forgot to dwell deeper - a car marketed as the "cheapest car", created huge initial interest. But it never took off.
Ratan Tata admitted, later, that the reason for the failure of the idea was the term which became synonymous with Nano - "The cheapest car."
Buying a car in India is associated with social status and prestige; if a person owns a car, he is assumed to be successful and settled. But the word 'cheap' in its marketing campaigns spoiled everything.
The company also failed to dwell upon the competition from used cars. Used cars (2nd hand cars) from other companies, which were much better in quality, space and mileage were available to the same customer-segment at the same or lesser price than Nano.
Tailpiece.
Got up the alarm, went through our chores and were ready well within time. Washing machinex of the bed linen. By a half past 10, the AM and I made a repeat visit to the Pookkodu panchayat, dumped our House tax-exemption applications with Rs.5-court fee stamp-attached duplicate request and collected the receipts.
On return, after putting the clothes on the line for drying, was off to pull out money from the ATM, a visit to the dentist for remedy, buying of bananas and medicines only to be prevented by the toothy because of my medical status post jaundice - I'd missed out on that, it was my mistake.
Bineesh had come by the evening and the action plan for the extra cistern and a new cover was put down. Returned the medicines by evening.
The Cobra Effect is a term in economics. It refers to a situation when an attempted solution to a problem makes the problem worse.
The name was coined based on an incident in colonial India.
For some reason, there were too many venomous cobra snakes in Delhi. People were dying due to snake bites and it became scary for almost everyone to step out of their houses.
The government of the day had to get into action to stop this menace and it offered a silver coin for every dead cobra. The results were great, a large number of snakes were killed for the reward.
Eventually, however, it led to some serious unwanted consequences. After a short-term dip in cobra population, it started going up.
This was because a few people began to breed cobras for the income. When the news reached the government, the reward programme was scrapped, causing the cobra breeders to set the now-worthless snakes free. As a result, the cobra population further increased. The solution for the problem made the situation even worse.
The unintended consequence for a well-intention-ed ideacled to making the problem worse.
Trying a new solution?
or
Planning to tackle an existing problem with a new idea?
Well, it's time to pause and think about how people would respond to the new idea that may sound great on paper!
Specially, the solutions that try to affect people who have a tendency to game the system - intentionally or otherwise.
They have a tendency to take short-term advantage of any situation though that may lead to harm to them and society-at-large only in the long run.
Every solution has consequences and those consequences may lead to certain situations where rather than solving a current problem, you may end up with more complex problems.
A few more examples.
* A similsr type of incident like increasing cobra-population occurred in Vietnam. The rulers
realised that there were too many rats in Hanoi and the spread of plague was imminent. They
created a reward programme that paid a prize for each rat killed. To obtain the bounty, people
would provide the severed rat tail. After initial success, the officials, however, started noticing
rats with no tails. The rat catchers would capture rats, cut off their tails and then release them back
into the sewers so that they could breed and produce more rats, thereby increasing their profits.
As they say the road to hell is paved with good intentions, similar mistakes are happening around us everyday when the decision-makers fail to take a 360 degree view of all the outcomes of an action, before implementation.
* Some time ago, Philadelphia in the US passed a "soda" tax - a US $1 tax on a typical 2-litre bottle of soft-drink - as a "sin tax - in the national war on obesity. But the natives didn't cut calories as a result of the tax on sweetened drinks, nor was there a shift towards any healthier option. Instead, most of them just drove outside the city to buy the same colas, from stores where they didn't have to pay the tax. But the poor paid more as they could not find it affordable to drive out of the city to buy their drinks. In the end, the city suffered loss of revenue due to lower sales whereas the lower section of society paid more.
* The Nano Car - a small car that could never make it big!
A car considered as a brilliant product, launched in a segment having a billion dollar opportunity. Hopes ran high, the company expected expected all present and potential two-wheeler owners would shift to Nano.
But they forgot to dwell deeper - a car marketed as the "cheapest car", created huge initial interest. But it never took off.
Ratan Tata admitted, later, that the reason for the failure of the idea was the term which became synonymous with Nano - "The cheapest car."
Buying a car in India is associated with social status and prestige; if a person owns a car, he is assumed to be successful and settled. But the word 'cheap' in its marketing campaigns spoiled everything.
The company also failed to dwell upon the competition from used cars. Used cars (2nd hand cars) from other companies, which were much better in quality, space and mileage were available to the same customer-segment at the same or lesser price than Nano.
Tailpiece.
Got up the alarm, went through our chores and were ready well within time. Washing machinex of the bed linen. By a half past 10, the AM and I made a repeat visit to the Pookkodu panchayat, dumped our House tax-exemption applications with Rs.5-court fee stamp-attached duplicate request and collected the receipts.
On return, after putting the clothes on the line for drying, was off to pull out money from the ATM, a visit to the dentist for remedy, buying of bananas and medicines only to be prevented by the toothy because of my medical status post jaundice - I'd missed out on that, it was my mistake.
Bineesh had come by the evening and the action plan for the extra cistern and a new cover was put down. Returned the medicines by evening.
No comments:
Post a Comment