Scientific Definition
Cuts that lift margin this quarter erode product quality and brand equity over years.
Plain-English Definition
Cuts that lift margin this quarter erode product quality and brand equity over years.
Feynman Explanation
Optimization devours its own customers in slow motion.
Core Principle
Cuts that lift margin this quarter erode product quality and brand equity over years.
Mechanisms
Pending editorial review.
Cuts that lift margin this quarter erode product quality and brand equity over years.
Pending editorial review.
Pending editorial review.
Margin compression is borrowed from brand equity.
Pending editorial review.
Pending editorial review.
Inputs (Triggers)
Pending editorial review.
Outputs (Behaviors)
Pending editorial review.
Behavioral Signature
Optimization devours its own customers in slow motion.
Examples
- Airlines and food brands with measurable post-cut churn.
- Margin compression is borrowed from brand equity.
Pending editorial review.
Famous Experiments
Pending editorial review.
Design Principles
- Quality-floor metrics. NPS-tied operating budgets.
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.
- Quality-floor metrics. NPS-tied operating budgets.
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.
Earn-outs designed to retain founders often demotivate the team they bought.
Funnels rewarded for new logos under-invest in retention and lifetime value.
Narrowly tied bonuses get gamed; people optimize the metric, not the underlying goal.
Re-hires often get raises larger than internal promotions.
Pay tied to stock price encourages short-term price management.
CEO pay tied to size rewards deal-making even when acquisitions destroy value.
Sales forecasts under-set to ensure attainment bonus.
Capital tied to growth rates funds unsustainable scaling and unit-economics denial.
Managers measured by team size grow teams beyond need.
Awards reward visible novelty; quiet excellence goes unrecognized.
Innovation programs designed to signal innovation, not to produce it.
Managers hoard talent; cross-team mobility dies.