Linearization Fails
Linearization refers to simplifying causal relationships to make them more predictable, and in many cases it fails.
- Extrinsic motivation holds that performance on a given problem can be improved by giving people larger bonuses or promoting them. Sometimes this actually does improve performance, but it often backfires.
- What if you give large bonuses to a division that is doing well? The problem may simply have been too easy in the first place.
- What if you withhold bonuses from a division that isn’t doing well? The problem may actually be very difficult, and they may be performing reasonably well given the circumstances.
- There is a risk of ending up in a situation akin to giving bonuses proportional to the number of lines of code written.
- Only part of a key process gets optimized, intrinsic motivation is suppressed entirely, people become addicted to external stimuli, or internal competition intensifies.
- The subprime mortgage crisis arose as a backlash from the U.S. government incentivizing ordinary people to “take out loans and buy homes,” and encouraging financial institutions to originate mortgage loans. This created a bubble throughout the entire financial system, which then collapsed and damaged economic fundamentals.
- South Korea’s low birth rate problem cannot be genuinely solved by simply offering money to people when they have children.
Links
- Management 3.0: R2022 Management 3.0
- Z20230217_3 In education (Transfer), rules should not be taught first. Learners should be allowed to explore.
- Imparting knowledge does not bring about behavioral change.
- M230310_1 The trap of mindless empathy
- Incorrect premise: Using motivational interviewing will make the other person listen to what I say.
- Don’t focus on vitamin D
- Administering large amounts of vitamin D does not improve health.
- M230401_1 The more expert someone is, the more ambivalence they hold
- The more expert someone is, the more they consider complex rather than linear causal relationships.