8 - Perverse Incentives

Governments often try to modify human behavior. Not always successfully. A perverse incentive is an incentive that has an unintended and undesirable result that is contrary to the intentions of its designers. It is a wide-spread phenomenon in organizations and society at large.

For instance rewarding the military-industrial complex for war or the pharmaceutical industry for keeping people sick (an develop medicines to treat the sickness).

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