Switching Costs is what does it cost to leave?. It sits in the Cognition dimension (COG) of the Human Behavior Taxonomy™ as element HBT-COG-0654, within the Economics family. The core principle: what does it cost to leave?. In incentive terms, it matters because it changes the payoff people perceive before they choose — which means it can be designed for, or exploited.
Scientific Definition
What does it cost to leave?
Plain-English Definition
What does it cost to leave?
Feynman Explanation
The deepest moats are made of inconvenience.
Core Principle
What does it cost to leave?
Mechanisms
Pending editorial review.
What does it cost to leave?
Pending editorial review.
Pending editorial review.
Pending editorial review.
Pending editorial review.
Designing customer and employee architecture.
Inputs (Triggers)
Pending editorial review.
Outputs (Behaviors)
Pending editorial review.
Behavioral Signature
The deepest moats are made of inconvenience.
Examples
- Enterprise software lock-in. Friendship. Cultural fit.
- Designing customer and employee architecture.
Pending editorial review.
Original analysis from The Incentives Lab — how this element behaves inside real payoff structures.
Why this element matters to incentive design
The mistake with this element is treating it as irrationality. It is almost always a rational response to a payoff nobody wrote down. The mechanism underneath it is straightforward: what does it cost to leave?. You can recognize it in the field by its signature: the deepest moats are made of inconvenience. Every element in the Cognition dimension changes the perceived payoff of an action before the action happens, which is exactly where incentive design has leverage.
How it gets exploited
Left undesigned, designing customer and employee architecture. It is amplified whenever designing customer and employee architecture. Inside organizations that shows up as designing customer and employee architecture. The pattern is the same one Goodhart's Law describes: the measurable proxy attracts the effort, and the purpose behind it quietly loses funding.
How the Lab designs around it
The redesign move is to periodically estimate every key vendor's switching cost. Don't be surprised later. Treat it as infrastructure. Once you can see it in your own system, most of the argument about culture resolves itself.
Famous Experiments
Pending editorial review.
Design Principles
- Periodically estimate every key vendor's switching cost. Don't be surprised later.
Measurement Approaches
Pending editorial review.
Evidence
Pending editorial review.
Pending editorial review.
The Perverse Incentive Lens™
How this behavior is exploited — and how to redesign around it.
- Periodically estimate every key vendor's switching cost. Don't be surprised later.
Pending editorial review.
Pending editorial review.
Interactive Mini Network
Click any neighbor to re-center the graph and follow the threads of connection.
Knowledge Graph Neighbors
Auto-linked to the rest of the Human Behavior Taxonomy by family, domain, dimension, and shared keywords.
Fixed costs don't scale with output; variable costs do.
Exploiting price differences between markets for risk-free profit.
The study of how real humans actually decide — bounded, social, emotional, and inconsistent.
With clear property rights and low transaction costs, parties negotiate to efficient outcomes.
Specialize in what you give up the least to do.
Complements raise each other's value; substitutes lower it.
Innovation destroys old industries and creates new ones.
Each additional unit produces less marginal benefit.
A long-run planner self in conflict with a short-run impulsive self.
Owning something raises its valuation — sellers want more to give it up than buyers will pay to acquire.
Bad money drives out good when both are legally equivalent.
The mythical fully rational, self-interested, utility-maximizing agent neoclassical models assume.
Where Switching Costs is cited in the corpus
Essays, field guides, and diagnostics from The Incentives Lab that apply this element.
- EssayGoodhart's Law in the Real World
How measurable proxies capture judgment.
- EssayThe Perverse Incentives Hiding in Your KPIs
Cognitive shortcuts turned into scorecards.
- EssayAI Agents Inherit Your Incentives
How this element propagates into automated systems.
- ReferenceThe Periodic Table of Human Behavior
The full 1,267-element map this page belongs to.
- CourseIncentives 101
The free ten-part primer on reading a payoff structure.
Questions about Switching Costs
- What is Switching Costs?
- Switching Costs is what does it cost to leave?. It sits in the Cognition dimension (COG) of the Human Behavior Taxonomy™ as element HBT-COG-0654, within the Economics family. The core principle: what does it cost to leave?. In incentive terms, it matters because it changes the payoff people perceive before they choose — which means it can be designed for, or exploited.
- What is an example of Switching Costs?
- Designing customer and employee architecture. The Incentives Lab catalogs everyday, organizational, and historical instances of this element on its Human Behavior Taxonomy™ page (HBT-COG-0654).
- How is Switching Costs exploited?
- Designing customer and employee architecture.
- How do you design around Switching Costs?
- Periodically estimate every key vendor's switching cost. Don't be surprised later.
- Which behavioral dimension does Switching Costs belong to?
- Switching Costs is classified in the Cognition dimension (COG) of the Human Behavior Taxonomy™, family "Economics", class "Mental Model". Its permanent identifier is HBT-COG-0654 and its evidence grade is B.