money & economicsWikipedia2010 · New York, USA
An eyeglass seller found that insulting angry customers boosted his Google ranking
A perverse incentive is a rule or reward that accidentally encourages the opposite of what its designer wanted. Around 2010, the online retailer DecorMyEyes noticed that complaints about it pushed its site to the top of Google results, which drove more traffic. The owner, Vitaly Borker, began answering customers who reported bad quality or wrong orders with insults and threats. Attention from the angry reviews paid off in traffic, so the behaviour continued for about a decade. He was eventually jailed twice in federal prison over charges arising from these messages.
The case shows how metrics that reward attention can reward bad behaviour, because outrage and visibility are measured in the same way as quality. Economists and policymakers watch for these backfires because they turn sensible rules into harmful outcomes.
The classic example of a perverse incentive is the cobra effect, in which a bounty on cobras in colonial Delhi led people to breed them.
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