Unintended Consequences: the power of the Cobra Effect

Cobra effect is the attempted means to solve a problem that leads to an array of unintended consequences. Hence, worsening the situation.

In the colonial rule of the British in India – the British administration took notice to the anxiously increasing venomous cobras in Delhi. They took notice of the issue and advocated a bounty to be placed for every dead cobra. Initially, the strategy was effective – people brought back an increasing number of dead snakes. However, with time enterprising people feed off the financial incentive and began breeding cobras, as a means to generate an income. As the administration became aware of the opportunist, they scrapped the bounty. Eventually, the cobra farmers now possessed worthless cobras which were released back into the wild. Hence, increasing the overall population of the Cobras. This is the origin of the Cobra Effect.

Similarly, an incident took place in Hanoi under French Colonial rule. A bounty was initiated that provided a reward for each killed rat. As a result, people started to severe the rat tail as evidence for a dead rat to obtain the bounty. With time, Colonial officials started to observe rats with no tail’s roaming around the city. The Vietnamese rat catchers would capture rats, severe off their tail’s, and then release them back into the sewers to procreate. Hence, increasing the population of rats. This enabled the rat-catchers to generate revenue from the bounty program.

Another instance of the cobra was evident in the 1980s, Mexico City suffered extreme air pollution caused by the cars driven around by 18 million residents. The city instated Hoy No Circula. A law imposed to reduce 20% off the cars from the last digits of their license plates. The impact of imposing this law allowed some people to carpool, use public transports and taxis. However, those who undermined the government and contradicted against the law brought a second car with a different license plate. The purchase of the second car was even more detrimental. It was a cheaper running vehicle and contributed to air pollution at a higher rate.

How to avoid the Cobra Effect?

To avoid cobra effect is to realise the conventional thinking between two points is not an ideal means to solve a problem. If we find ourselves eager to jump into action to solve a problem, we underestimate the symptoms of the problem. When we consider the problem before acting on it, we become better at preventing it.

Take precedence over second order thinking

In the examples above the use of first-order thinking is a convenient method to solve the immediate problem without realising unintended consequences.

Ray Dalio suggests:

“Failing to consider second- and third-order consequences is the cause of a lot of painfully bad decisions, and it is especially deadly when the first inferior option confirms your own biases. Never seize on the first available option, no matter how good it seems, before you’ve asked questions and explored.

The use of Second-order thinking allows us to consider whether the initial solutions or our biases are acceptable. Consider second, third or nth order of consequences to favour a decision that is well-thought-out by asking ‘and then what?’. It suggests repeatedly thinking about the consequences of a decision like eating junk food every day and using that information to make a decision. In hindsight, you’re more inclined to consume produce that is health. 

Gear up with thinking models

The development of mental models can assist us in visualising unintended consequences. They act as a contingency which defogs the shroud over bad decisions. One to consider would be the Pre-mortem analysis.

Defined as:

Pre-Mortem analysis is a technique to help prevent having to complete a post mortem on a total project failure. The purpose is to identify vulnerabilities in the plan. A Pre-Mortem analysis is a forward looking process rather than the backward looking process of a post-mortem.

By creating a model that enriches a solution don’t rush into implementing it. Acquire feedback through testing to validate the model. Challenge assumptions or signs of troubleshooting to improve upon the model.

Act within your circle

We have a circle of speciality that provides us with the opportunity to make well-educated decisions. However, if we act outside our circle, our competency level, our speciality – we begin to engender uncalculated risk that gives rise to unintended consequences. If you began fixing your car without consoling a mechanic, you’re acting outside your competency hence increasing the problem.

The ramification of unplanned decisions can be reckless, which could impact our personal and professional lives. We assume our decisions hold value, but the unintended consequences do not progress linearly. When adhering to make a decision contemplating the consequences is pivotal. Hence, the use of ‘thinking mental model’ can be useful.

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