Abruzzi Syndrome

Steve Rhoads, in his book The Economist's View of the World, tells the story of the Italian town of Abruzzi, which had a problem with too many vipers. To motivate citizens to kill vipers, the town fathers created a viper bounty to be paid for dead vipers. For every dead viper a certain amount of incentive was to be paid to the villagers.



First year, everything went according to the plan, or so it seemed. A satisfactory number of vipers was brought and bounties paid. Following year, to the fathers' surprise, more arrived at their doorstep contrary to their expectation. Alas, the supply of vipers increased. Reason?

Townspeople had started breeding them in their basements. The problem, of course, is that the town fathers rewarded the wrong thing. What they wanted was not more dead vipers, but fewer vipers in the first place.

People often switch from one activity to another in response to changes in their incentives. Policymakers who fail to recognize the possibility of such "switching effects" invite unforeseen, and often unpleasant results.

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