\u201cSHOW ME THE INCENTIVES AND I WILL SHOW YOU THE OUTCOME.\u201d
\n– Charlie Munger \ud83d\udcdd
\nI love this quote about how incentives drive nearly everything.<\/p>\n
In Vietnam \ud83c\uddfb\ud83c\uddf3, under French colonial rule, there was a rat \ud83d\udc00problem. To solve the rat infestation, the French offered a bounty \ud83d\udcb2on rats, which could be collected by delivering a rat\u2019s tail as proof of murder. Many bounties were paid out, but the rat problem didn\u2019t improve \ud83e\uddd0
\n\ud83e\ude96Officials soon noticed rats running around without tails\u2013people were cutting off the tails and releasing the rats to breed, so as to increase the pool of potential bounty revenue for themselves \ud83e\udd13<\/p>\n
Unknowingly, they have fallen for the phenomenon known as GOODHART\u2019S LAW \ud83d\udc68\ud83c\udffb<\/p>\n
\u270d\ufe0f\u201cWHEN A MEASURE BECOMES A TARGET, IT CEASES TO BE A GOOD MEASURE.\u201d
\nIn other words, when we set one specific goal, people will tend to optimize for that objective regardless of the consequences.<\/p>\n
\ud83d\udca1One of the first steps in solving a problem is determining the right measure to gauge success. When we want to objectively find the best solution, we should recall the concept of Goodhart\u2019s Law and realize that rather than using a single number, THE BEST ASSESSMENT IS USUALLY A SET OF MEASUREMENTS \ud83d\udd1d<\/p>\n
\ud83c\udfc6 By choosing multiple metrics, we can design a solution without the unintended consequences that occur when optimizing for a narrow objective\u203c\ufe0f<\/p>\n","protected":false},"excerpt":{"rendered":"
\u201cSHOW ME THE INCENTIVES AND I WILL SHOW YOU THE OUTCOME.\u201d – Charlie Munger \ud83d\udcdd I love this quote about how incentives drive nearly everything. In Vietnam \ud83c\uddfb\ud83c\uddf3, under French colonial rule, there was a rat \ud83d\udc00problem. To solve the rat infestation, the French offered a bounty \ud83d\udcb2on rats, which could be collected by delivering a rat\u2019s tail as proof of murder. Many bounties were paid out, but the rat problem didn\u2019t improve \ud83e\uddd0 \ud83e\ude96Officials soon noticed rats running around without tails\u2013people were cutting off the tails and releasing the rats to breed, so as to increase the pool of potential bounty revenue for themselves \ud83e\udd13 Unknowingly, they have fallen for the phenomenon known as GOODHART\u2019S LAW \ud83d\udc68\ud83c\udffb \u270d\ufe0f\u201cWHEN A MEASURE BECOMES A TARGET, IT CEASES TO BE A GOOD MEASURE.\u201d In other words, when we set one specific goal, people will tend to optimize for that objective regardless of the consequences. \ud83d\udca1One of the first steps in solving a problem is determining the right measure to gauge success. When we want to objectively find the best solution, we should recall the concept of Goodhart\u2019s Law and realize that rather than using a single number, THE BEST ASSESSMENT IS USUALLY A SET OF MEASUREMENTS \ud83d\udd1d \ud83c\udfc6 By choosing multiple metrics, we can design a solution without the unintended consequences that occur when optimizing for a narrow objective\u203c\ufe0f<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6,4],"tags":[],"class_list":["post-113","post","type-post","status-publish","format-standard","hentry","category-corporate-business","category-leadership"],"_links":{"self":[{"href":"https:\/\/rafaguilarc.com\/index.php?rest_route=\/wp\/v2\/posts\/113","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/rafaguilarc.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/rafaguilarc.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/rafaguilarc.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/rafaguilarc.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=113"}],"version-history":[{"count":1,"href":"https:\/\/rafaguilarc.com\/index.php?rest_route=\/wp\/v2\/posts\/113\/revisions"}],"predecessor-version":[{"id":685,"href":"https:\/\/rafaguilarc.com\/index.php?rest_route=\/wp\/v2\/posts\/113\/revisions\/685"}],"wp:attachment":[{"href":"https:\/\/rafaguilarc.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=113"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/rafaguilarc.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=113"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/rafaguilarc.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=113"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}