Trail4 steps

When numbers lie

Incentives that backfire, metrics that stop measuring, and how we misjudge ourselves.

Numbers make the world easier to manage, and easier to manage badly. These four ideas are useful mental models for anyone who sets targets, reads statistics or makes decisions.

Start the trail →

I
Start with a bounty that made a rat problem worse.
No. 028StoryEconomics
The cobra effect: when rewards backfire Pay people to kill pests and some of them will start breeding pests. The famous cobra version may be a legend, but the rat version in Hanoi really happened.
II
The general law behind it: once a number becomes a target, people optimise the number.
No. 050LawEconomics
When a measure becomes a target Hospitals cut waiting times by not counting patients. Schools teach to the test. The same law explains both.
III
A measure that has stayed useful, partly because nobody is rewarded for moving it.
No. 014ConceptEconomics
The Big Mac index A 1986 joke in The Economist became one of the most cited ways to compare currencies, using the price of a hamburger.
IV
And the hardest numbers to get right: our estimates of ourselves.
No. 036PhenomenonPsychology
The Dunning–Kruger effect is not what the internet says It started with a bank robber who thought lemon juice made him invisible. The famous “Mount Stupid” chart was never in the paper.