Hamburger Menu

Blog

Traders, Stories, Celebs, and more

The Cobra Effect

What happens when King Cobras face the King of Britain? Unintended consequences.

The details are spotty, but the story of the Cobra Effect lives on. Regardless of its historical accuracy, it is a good anecdote for understanding the concepts of incentives and unintended consequences.

The British ruled India from 1858 to 1947. During this time they became concerned about the amount of deadly cobras in the city of Delhi. The Brits implemented a simple solution to deal with the cobras. They would pay a bounty for every dead cobra, to the person who presented the carcass.

This worked well. Cobras were killed by the locals to cash in the bounty at a fast pace.

However it did not stop there. Some people went beyond the intention of the bounty, and instead started breeding  their own cobras. Inexpensive to breed, the cobras that were later all killed provided a way to sustain families simply by cashing in the bounties.

When the British figured out this twist, they cancelled the bounty plan. Simple enough, right? Again, this led to unintended consequences when the cobra farmers released the now worthless cobras into the city.

The end result was a lot of money paid out in bounties, the overall amount of cobras in Delhi increasing, and a rise in the time Brits spent watching the ground anxiously.

See in: Informative
Subscribe to our RSS Feed!

Read More


Archives