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Rewards have unintended consequences

December 2, 2010

Years ago there was a running joke about a company that put a “bug bounty” out for their developers so that code quality would improve. Because of lack of separation between development and validation/QA, developers were injecting or designing bugs INTO the code because they were paid more to fix the bug than they were preventing the bug in their code. That’s an unintended consequence for you

Today, there are two good examples of these kinds of “rewards based unintended consequences”

Google – did you know you could get higher search engine rankings with negative comments that linked to your site?

Google has responded to a New York Times story which revealed the search engine was rewarding websites that have dozens of complaints and negative reviews with high rankings….the paper followed the story of Clarabelle Rodriguez, who used Google to search for new glasses. The top unpaid result was a site called DecorMyEyes.com.

Borker explained …” NEGATIVE advertisement” was his central sales strategy – the more online abuse he and his website got, the higher his Google ranking….

Oopsie.

And now Michelle Malkin on extended unemployment benefits

None other than Paul Krugman of the Fishwrap of Record acknowledges that generous unemployment benefits reduce the incentive to seek jobs.

Now comes first-hand reporting from liberal columnist Margery Eagan of the Boston Herald that yes, in fact, there are some unemployed people out there responding to perverse government incentives and gaming the system to stay on the dole.

Abuses include people working on the side but lying about it, getting job offers but trying to wait to start working until after the unemployment checks run out, etc.

Most people won’t game the system – but if there is a perverse incentive to do so, it’s a lot easier and more likely given the inertial nature of humanity to do so. Reward the behavior you really want – in the case of Google they came up with ‘an undisclosed algorithmic change to prevent negative comments from benefiting search results.’ We’ll just have to trust them on that.

Unemployment benefits? The whining continues….

Boston Globe

What Republicans are doing is using the unemployed as a bargaining chip for getting what they really want. That would be ending up with a Merry Christmas for all — the extension of the Bush tax cuts for everyone, not just the middle class

Bulletin flash to the author: that’s called “politics”

Another article at Slate:  because the economics of the unemployment benefits are pretty straightforward: They cost something, but they help the recovery along.

That’s a euphemism for “we’re trying to reinflate the housing market bubble and more people potentially out of work will run counter to that Hope”. At least they admit that “They do not come cheap to the government and do tend to lengthen the time it takes for a worker to find a new job

Careful what you reward as you develop strategies….you might just get it – in spades

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