15 – The Cobra Effect: Understanding Perverse Incentives

In this conversation, Rome and Obee Won explore the concept of the Cobra Effect, a phenomenon where incentives designed to solve problems end up exacerbating them. They discuss various historical examples, including the Ford Pinto scandal and the Wells Fargo fake account scandal, to illustrate how perverse incentives can lead to unintended consequences. The discussion also delves into the ethical implications of decision-making and the nature of human behavior in response to incentives. Ultimately, they emphasize the importance of understanding the impact of policies and the need for thoughtful consideration in creating effective solutions.