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Building Less Flawed Metrics

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  • Manheim, David

Abstract

Metrics are useful for measuring systems and motivating behaviors. Unfortunately, naive application of metrics to a system can distort the system in ways that undermine the original goal. The problem was noted independently by Campbell and Goodhart, and in some forms it is not only common, but unavoidable due to the nature of metrics. There are two distinct but interrelated problems that must be overcome in building better metrics; first, specifying metrics more closely related to the true goals, and second, preventing the recipients from gaming the difference between the reward system and the true goal. This paper describes several approaches to designing metrics, beginning with design considerations and processes, then discussing specific strategies including secrecy, randomization, diversification, and post-hoc specification. Finally, it will discuss important desiderata and the trade-offs involved in each approach.

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  • Manheim, David, 2018. "Building Less Flawed Metrics," MPRA Paper 90649, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:90649
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    References listed on IDEAS

    as
    1. Imran Rasul & Daniel Rogger, 2018. "Management of Bureaucrats and Public Service Delivery: Evidence from the Nigerian Civil Service," Economic Journal, Royal Economic Society, vol. 128(608), pages 413-446, February.
    2. Strathern, Marilyn, 1997. "‘Improving ratings’: audit in the British University system," European Review, Cambridge University Press, vol. 5(3), pages 305-321, July.
    3. David Manheim & Scott Garrabrant, 2018. "Categorizing Variants of Goodhart's Law," Papers 1803.04585, arXiv.org, revised Feb 2019.
    4. Campbell, Donald T., 1979. "Assessing the impact of planned social change," Evaluation and Program Planning, Elsevier, vol. 2(1), pages 67-90, January.
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    Cited by:

    1. Len Fisher & Anders Sandberg, 2022. "A Safe Governance Space for Humanity: Necessary Conditions for the Governance of Global Catastrophic Risks," Global Policy, London School of Economics and Political Science, vol. 13(5), pages 792-807, November.

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    More about this item

    Keywords

    Metrics; Goodhart's Law; Campbell's Law; Cobra Effect; Management; Control Theory;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy
    • Z18 - Other Special Topics - - Cultural Economics - - - Public Policy

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