Goodhart’s Law
Also known as: Cobra Effect
We will adapt our performance to how we are measured. Humans will naturally try to “game” any system of measure to which they are held. This means that performance against a standard doesn’t necessarily mean actual value is being created – it just means that someone is achieving a metric though some method. It’s up to the evaluator to ultimately determine if achieving this measure corresponds with the actual desired end result.
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The Importance of Goodhart’s Law
“…once a social or economic measure is turned into a target for policy, it will lose any information content that had qualified it to play such a role in the first place.”
- Cobra Effect
- Goodhart’s Law
- Campbell’s Law
Examples
“Hospitals in Britain were taking too long to admit patients, so a penalty was instituted for wait times longer than 4 hours. So, some hospitals had ambulances stall and drive longer to shorten in-hospital wait time, perverted very function of the institution.” (from the “Monday Musings” newsletter)
In British colonial India, the government offered a payment for every cobra caught and turned in. Because of this, local farmers began raising cobras, then “catching” them and receiving payment, thereby gaming the system. When the deception was caught and the program scrapped, the farmers released all their captive cobras, making the problem worse than it was before.