[bikeformind]

Classic perverse incentive failure.

Most famous example is called the “cobra effect.” In the 1800’s some towns in India had a problem with cobra infestation, so the governement offered a bounty for dead cobras.

People started farming cobras to collect the bounty.

Eventually too many dead snakes were being turned in, so the government stopped paying. As a result, the newly made “cobra farmers” just released all the cobras on to the streets, doubling the population.

[magicalist]

And as usual with these nice simple narratives, there's no evidence this actually happened (and compelling evidence that it didn't):

https://www.reddit.com/r/AskHistorians/comments/pmjrdg/is_th...

[m000]

Something very similar did happen though, during the "Great Hanoi Rat Massacre" [1].

[1] https://en.wikipedia.org/wiki/Great_Hanoi_Rat_Massacre#Hirin...

[rcv]

Reminds me of that people who are 3D printing firearms and parts to sell off at gun buyback programs [1][2]

[1] https://www.theguardian.com/us-news/2022/oct/11/new-york-gun... [2] https://www.vice.com/en/article/akee4e/someone-made-dollar30...

[fragmede]

Reading your link, the bounty was real actual thing that happened, it's that the farming of snakes isn't something that was proven to be happening. The link actually says that deaths increased due to an unintended consequence of the bounty system, just for different reasons than is usually mentioned.

[magicalist]

The post says deaths in _houses_ increased due to snake habitat destruction that drove them there. It suggests that could be because of snake death awareness raised by the bounty system, but that feels a step too removed to call it an "unintended consequence".

It's not due to a perverse incentive regardless, though, which is what the original anecdote is supposed to exemplify.

[fragmede]

One imagines that the goal was to decrease deaths of people regardless of whether they're inside or outside of houses.

[lifeisstillgood]

That link is the neatest answer I have read in ages - this whole story could easily become a hour long tv show

[viscountchocula]

Is it, though? By making disclosure a requirement, the market for sesame-free items is highlighted and elevated. It may find a profitable niche or it may not, but consumers are now better able to choose.

[ocdtrekkie]

Allergy labeling is likely a bit like support for people with disabilities: We regulate because the market doesn't work in these cases. The number of people who require accommodations are smaller than the value to make accommodating their needs profitable, so we use regulate because it's the right thing to do.

[coryrc]

The basis of the (edit: theoretical) free market is full information for all participants, which requiring more information on the label is helpful for. The problem here is they won't allow "may contain traces of X" as a valid acknowledgement, despite being easy to understand.

[xyzzyz]

> The basis of the free market is full information for all participants,

It’s not, and in fact it is opposite of truth. The reason, for example, why free market economy works better than centrally planned one, is precisely that obtaining full knowledge is impossible, so it is impossible to effectively centrally plan, whereas in market economy, each individual contributes their own private knowledge that is unavailable to other people, through participating in market and communicating it through price mechanism.

See, for example, Thomas Sowell’s “Knowledge and Decisions”, which is precisely about this point, or for more classic reference, Hayek’s “The Use of Knowledge in Society”. Again, to reiterate, the entire point of market economy is that nobody has full knowledge.

[coryrc]

Perhaps I'm sloppy with my terminology, but https://en.m.wikipedia.org/wiki/Perfect_competition seems to agree more with my statement than yours.

[xyzzyz]

This is just an assumption of a mathematical model, not “the basis of the free market”. That’s like saying that the basis of the behavior of gases is the fact that the atoms are perfectly round and perfectly bouncy balls.

[adventured]

Perfect competition can never exist. There is no scenario where market participants (which make the market) will each have perfect knowledge and act perfectly upon that knowledge.

Along with sometimes being smart or hard working, people are also sometimes lazy, dumb, irrational, careless, destructive, and so on. The point being, there is a wide variety and they bring their messy contributions to the market, which makes for a very messy market. There can never be perfect anything. It's not even a good theory, it's garbage, it would only work in a simplistic simulation with no chaos.

Perfection competition theory is incorrect, badly flawed in a similar manner, as the efficient market hypothesis [1].

[1] https://en.wikipedia.org/wiki/Efficient-market_hypothesis

[KennyBlanken]

...because the warning was not valid.

It was being slapped on everything to a)be lazy about not actually having allergens get into food because b)it fooled consumers into thinking that the disclaimer meant they weren't liable for allergens in food.

[rayiner]

To be clear, we do it through the government because it’s otherwise inefficient: it imposes a bigger collective cost on society than the benefit to the individuals. Whether “it’s the right thing to do” is a moral construct. European countries, for example, have much narrower requirements for accommodation of people with disabilities than the ADA.

[magicalist]

Though maybe more pertinent, the EU has required sesame allergen labeling since 2003.