Incentive super-response tendency
Also known as: Perverse incentives · Reward and punishment superresponse
What it is
People respond to rewards and punishments far more strongly and creatively than expected, often by gaming the metric rather than serving its purpose. Munger puts this first on his list.
Example Paying support staff per ticket closed produces many closed, unsolved tickets.
Related
Appears in
References
- Wikipedia: Incentive super-response tendency en.wikipedia.org
- Munger's 25 standard causes of human misjudgment fs.blog
- The 99 thinking errors in Rolf Dobelli's The Art of Thinking Clearly en.wikipedia.org
- Wikipedia: List of cognitive biases en.wikipedia.org
- Wikipedia: Cognitive bias codex en.wikipedia.org
More in “Deciding and acting: incentives, loss and commitment”
Overconfidence effectLoss aversionSunk-cost fallacyCognitive dissonanceMotivated reasoningStatus quo biasEndowment effectOptimism biasPlanning fallacyOutcome biasHyperbolic discountingScarcity errorAffect heuristicAction biasOmission biasDefault effectFear of regretAmbiguity aversionParadox of choiceDecision fatigueProcrastinationHedonic treadmillMental accountingEffort justificationIllusion of controlHouse-money effectWinner's curseMotivation crowdingNeomaniaNot-invented-here syndromeInability to close doorsOverthinkingStrategic misrepresentationDéformation professionnelleZeigarnik effectIllusion of skillDomain dependenceBeginner's luckSleeper effect"Get worse before it gets better" fallacyVolunteer's folly