Have you ever tried to fix a problem, only to make things worse? That’s called the Cobra Effect—when an attempted solution results in unintended consequences. Because most of our cause-to-effect experiences involve very simple, direct relationships, we tend to think in terms of linear chain of events. But the world is much more complex than we realise. In a real-world system, there will be multiple reinforcing and balancing connections between events, resulting in often unpredictable feedback loops.
The term “Cobra Effect” originated during the time of the British rule of colonial India. The British government wanted to tackle the worrying number of venomous cobra snakes in Delhi. Their strategy was to offer a bounty for every dead cobra. Creating this incentive was initially a successful strategy—many rewards were claimed and the number of cobra snakes spotted in Delhi started to decrease. However, the number of dead cobra snakes presented to the bounty office for the reward kept on rising. Why?
Turned out, enterprising people had started breeding cobra snakes to get the bounty. The government became aware of the scheme, and stopped offering the reward for dead cobra snakes. As a result, the cobra breeders set the now worthless animals free, increasing the cobra population in Delhi. This anecdote shows that the apparent solution to a problem can make a situation even worse.
Fixes that fail
“This archetype captures the common tendency of decision makers, when faced with a problem, to apply a ‘fix’ that reduces the strength of the problem. While it seems to work in the first instance, the fix fails in the long run because it has an unexpected outcome that amplifies the problem.”
Barry Newell & Christopher Doll, United Nations University.
There are many such anecdotes throughout history showing how well-meaning policies have resulted in the exact opposite of the intended result. For example, a similar incident happened in Hanoi, Vietnam, under the French colonial rule.
The regime created a bounty programme that offered a reward for each rat killed. To collect the reward, people had to provide the severed tail of a rat.
However, officials began noticing rats with no tails in Hanoi. The rat catchers would capture the animals, severe their tails, then release them back so that they could procreate and produce more rats, therefore increasing the potential revenue from the bounty programme.
Another example is the “Hoy No Circula” policy that was launched in Mexico City, prohibiting the circulation of a fifth of the vehicles in the city from Monday to Friday, based on the last digit of their license plates. Because the policy coincided with a massive influx of cheap cars in the country, people started buying more cars with different licence plates in order to circumvent the policy.
This is not a unique occurrence—many climate change policies ended up having unintended consequences. In 2005, the The UN Intergovernmental Panel on Climate Change launched an incentive scheme to cut down on greenhouse gases. The programme rewarded companies for destroying certain pollutants, and set the prices according to how serious the harm the pollutant could do to the environment. One of the highest bounties was attributed to HFC-23, a byproduct of a common coolant.
As a result, companies began to produce more and more of this coolant in order to destroy the corresponding byproduct waste gas, collecting millions of dollars in bounties in the process.
But public policies are not the only areas where the Cobra Effect is at play. We often make bad decisions in our day-to-day lives and work because we fail to consider the potential unintended consequences of our decisions.
How to avoid the Cobra Effect
The main way to avoid the Cobra Effect is to keep away from linear thinking—when our thinking proceeds in a sequential manner. Because a straight line between two points is the most efficient way to get from one place to another, linear thinking feels like the most intuitive way to solve a problem. But it’s often not the right way.
- Understand dynamic systems. In dynamic systems, there are two basic types of feedback loops. The first is reinforcing feedback—sometimes called positive feedback—which keeps a desired effect going. The second is balancing feedback—sometimes called negative feedback—which keeps the system in a state of balance. These two types of feedback loops explain why you should not think of dynamic systems as a chain of causal effects. Instead, try to predict how the behaviour of a dynamic system usually emerge from the complex feedback interactions between its parts. In other words, take a step back to see the big picture.
- Apply mental models. The amount of information we have is often limited and it is therefore impossible to predict all the potential consequences of a given decision. That’s why mental models—frameworks that give you a representation of how the world works—can be useful thinking tools. Mental models are basically cognitive rules of thumb that can help minimise unintended consequences when making a choice. They’re not perfect, but they’re often better than linear thinking.
- Use second-level thinking. While lots of mental models can be useful to avoid The Cobra Effect, the most powerful of all is probably second-level thinking, which forces us to consider the complex ramifications of the decisions we make. In essence, second-level thinking consists in laying down the second and third order consequences, taking into account our own biases, disentangling the signal from the noise, and using thinking systems to determine the most favourable decision.
There are many amusing anecdotes about The Cobra Effect, some of which I shared above, but the unintended consequences we face when using linear thinking to make decisions can have disastrous effects on our personal and professional lives. Of course, there is sometimes a place for intuition when making choices, but we’re often better off using mental models that minimise negative results.
Next time you’re tempted to make a decision based on your gut feeling or what seems to be the simplest path from A to B, remember what happened in Delhi during the colonial era when the British government implemented what seemed to be the most intuitive solution to their snake infestation problem.