(IJCH) "Campbell's Law" (or How rewards and metrics lead to the "Gaming" of any system)

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IJCH - Inside JaiChai's Head (Meaning: My Warped, Personal Opinions and Musings)

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From the Author:

Salutations.

I am JaiChai.

And if I haven't had the pleasure of meeting you before, I'm delighted to make your acquaintance now.

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I invite you to interact with everyone, learn, and have as much fun as possible!

For my returning online friends, "It's always great to see you again!"

Donald T. Campbell

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Donald Thomas Campbell (November 20, 1916 – May 5, 1996) was an American social scientist.

He coined the term "evolutionary epistemology" and developed a selectionist theory of human creativity.

A Review of General Psychology survey, published in 2002, ranked Campbell as the 33rd most cited psychologist of the 20th century.

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Fundamentally, "Campbell's Law" means that, when you reward people for a particular measure  - likes, clicks, tokens, dollars, referrals, etc. -  people will find a way to “game” the system.

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Gaming the system (also gaming the rules, bending the rules, abusing the system, cheating the system, milking the system, playing the system, or working the system) can be defined as using the rules and procedures meant to protect a system in order, instead, to manipulate the system for a desired outcome.

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In Reality, Gaming the System is not Cheating (Technically)

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Gaming the System, simply because it does not "break the explicit rules", is technically not cheating. But it certainly can produce behavior that reeks of dishonesty.

Who can be legitimately blamed? The rule makers? The "players"?

Where does one draw the line between "savvy gamesmanship" and blatantly unethical behavior?

Both of those terms are rather subjective; prone to morphing into whatever an individual's opinion may be at the moment.

The "Gray Area"; that is, the space in between the stated rules, can easily be exploited.

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Usually, after what is perceived as "a rigged game" and being burned too many times (think "Whales" in the crypto space), the masses - at the urging of Politicians and corporations - will call for governmental regulations that supposedly "Protect the General Public".

However, as we shall see later on, over-regulation for the sake of "Protecting the Public" often leads to Draconian edicts and subsequent, overly risk-averse behavior by those forced to comply.

Those who refuse to comply simply move to unregulated markets or take their ventures underground; thus contributing to a (or creating a new) black market.

The Cobra effect

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The cobra effect occurs when an attempted solution to a problem makes the problem worse, as a type of unintended consequence. The term is used to illustrate the causes of incorrect stimulation in economy and politics.

The term cobra effect originated in an anecdote set at the time of British rule of colonial India. The British government was concerned about the number of venomous cobra snakes in Delhi.

The government therefore offered bounty for every dead cobra. Initially this was a successful strategy as large numbers of snakes were killed for the reward.

For the locals, it was like, "Hooray! We are getting a BIG...

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Eventually, however, enterprising people began to breed cobras for the income. When the government became aware of this, the reward program was scrapped, causing the cobra breeders to set the now-worthless snakes free.

As a result, the wild cobra population further increased. The apparent solution for the problem made the situation even worse.

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The Employment Game

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In the Philippines, the corporate employment game can be seen at all large department stores and supermarkets.

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The employers avoid hiring full-time employees because of the benefits that are mandated (insurance, health plans, etc.).

Even in the biggest corporations, most employees are routinely paid the lesser part-time salary and never are permitted to work long enough to qualify as full-time employees - usually around 6 months.

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In other words, before the 6 month period, the part-time employees are let go for a short time, then re-hired.

Rinse and repeat.

Sports - A Gaming Paradise

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All sports that have weight classes are ripe for gaming.

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Just think of all the weightlifters, wrestlers, and MMA fighters that have gone up and/or done weight classes for some kind of financial or physical advantage.

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And this gaming of sports starts early in life; especially in sports where age limits and age group category rules exist, but are are rarely enforced.

Just look at USTA Junior Tennis tournaments.

"Playing Up"; meaning, a 12 y/o playing in the in higher age groups is sanctioned. But "Playing Down" is illegal.

Goaded by unscrupulous "tennis parents", I have seen many "small for their age" junior tennis players enter tournaments in the young age groups for which their true age makes them clearly ineligible.

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And false birth certificates allow illegitimate Little League Baseball players help their teams win championships.

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Over Regulating Leads to Extremely Risk-Averse Behavior

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Oftentimes, in an effort to "protect the public", anti-gaming regulations are enforced; regulations that produce some weird, unexpected consequences and deviant customer coping behaviors.

For example...

The Accredited Investor

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An accredited investor is a person or entity that can deal with securities not registered with financial authorities by satisfying one of the requirements regarding income, net worth, asset size, governance status or professional experience.

The term is used by the Securities and Exchange Commission (SEC) under Regulation D to refer to investors who are financially sophisticated and have a reduced need for the protection provided by regulatory disclosure filings.

Accredited investors include natural individuals, banks, insurance companies, brokers and trusts.

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For many, this is an unfair game; giving great advantages and special privileges to the wealthy elite.

It leaves the majority of the public out of the investing game and serves the interest of the greedy - the accredited investors AND the company going public.

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As a response, the has been a proliferation of ICOs - with their accompanying gaming.

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"Afraid of punishment, hospitals are discarding viable organs..."

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"Hospitals are throwing out organs and denying transplants to meet federal standards"

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Hospitals across the United States are throwing away less-than-perfect organs and denying the sickest people lifesaving transplants out of fear that poor surgical outcomes will result in a federal crackdown.

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"Gaming the System: How the Political Strategies of Private Prison Companies Promote Ineffective Incarceration Policies"

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Too many incarcerated people, you say?

Then how come the privatization of prison facilities is booming?

At a time when many policymakers are looking at criminal and juvenile justice reforms that would safely shrink the size of our prison population, the existence of private prison companies creates a countervailing interest in preserving the current approach to criminal justice and increasing the use of incarceration.

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Taxes

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Because of the early tyrannical tax policies by the British on the U.S. colonies, our forefathers believed in all forms of "gaming the British tax system" - in essence, tax avoidance.

Of course, they (for the most part) believed paying one's own "fair share", but nothing more.

Then and now, tax avoidance is perfectly legal.

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Let me make this clear: Tax evasion is illegal.

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Here's the difference between the two.

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Unsurprisingly, tax avoidance is practiced extensively by corporations and savvy individuals (e.g., Tech companies, Shoe Makers, Microchip fabricators, Clothiers, most billionaires, etc.).

Credit Cards

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Vendors who accept credit cards get hit with a double whammy.

They absorb the access/usage fee AND routinely lose disputes (in the form of costly chargebacks) whenever a customer launches a complaint.

This enables unethical customers to keep the so-called missing or "inferior" merchandise AND get a...

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Stated differently, 9 out of 10 times, the credit card company sides with the customer.

This well known policy has spawned a whole underground criminal industry based on vendor and credit card fraud .

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Sick of customers that chronically "Game the System" with fraudulent claims, more and more vendors are turning to cryptocurrency.

POS devices and networks are appearing almost monthly that makes it easier and cheaper for vendors to accept a wide variety of crypto coins.

The Cryptocurrency Space

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From opaque exchange or coin reserves to false capability claims, gaming abounds in the cryptocurrency space.

For example, transactions per second (tps) claims are all the rage.

Why?

Because most cryptocurrency investors equate higher tps with a superior protocol or platform; and hence, a better investment.

This is not true.

And the numbers can easily be "gamed".

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You see, simple things like 1,000 upvotes are still registered as 1,000 "transactions" - the same as a computation heavy transaction like a smart contract or multi-player online game (think Crypto Kitties and how it brought down Ethereum).

In short, it's the ability to handle complex actions, not just the gross number of actions that tells the real story about the robustness and future-proofing (scalability) of a cryptocurrency's platform.

Gaming the System spawns an Industry

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Learning how to game certain systems has grown into a lucrative industry - a Wild Wild West of snake oil salesmen.

Given the gullibility of most humans, there is no shortage of customers seeking to "get an edge", find (aka pay for) "the secret" and will do whatever it takes (legally; or if not, willing to take his chances with the authorities) to beat out the next guy.

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They want to know where the loopholes and current vulnerabilities are in their chosen fields/markets.

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From "key words" that are "SEO Friendly"...

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To video games...

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It seems like gaming the system resembles the Holy Grail to a lot of people.

My Thoughts on "Gaming the System"

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IMHO, gaming the system purely for personal gain is a slippery slope towards treacherous waters.

If you are always at the edge of legality, any small changes in the space - or a forgotten expiration expiration of an obscure regulation that only a lawyer would catch - pushes you into criminal territory.

Stated differently, operating on paper thin margins inevitably leads to some painful cuts!

Besides, the accelerated rewards are fleeting. They disappear as soon as others copy your actions.

Really. It just feels like bad karma producing behavior to me.

Sooner or later...

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I can think of only one exception where "Gaming the System" is appropriate.

It's the work of "White Hat Bug Bounty Hunters". They find flaws in protocols or vulnerabilities in security.

Then, instead of exploiting those flaws, they notify the network team.

No software is perfectly secure, no hardware infallible.

Sometimes it takes decades for a software bug or hardware vulnerability to manifest (e.g., the Spectre and Meltdown debacle).

Currently, every major company offers bounty programs for those who find and reveal "chinks in the corporate armor" - paying out rewards commensurate to the averted financial damage.

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I would love to hear your views on this issue.

Do you think "All People who Game the System are Cheaters"?

Are you in the "If No Rules Are Broken, No Foul" camp?

Do you oppose all forms of regulation or third party oversight?

Are you in the group that says, "C'mon guys. The real error here is in the verbiage; meaning, things are simply not stated correctly or that there's an obvious need for more clarity, explicit rationale that explains what the rules are meant for."

Do you believe that the "Spirit of the Law" is more important than the "Letter of the Law" and that it can be agreed upon within large groups?

Or are you indifferent, with no strong opinion either way?

By JaiChai

Mighty Kind of You for stopping by.

Truly hope to see you again!

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About the Author

Believing that school was too boring, he dropped out of High School early; only to earn an AA, BS and MBA in less than 4 years much later in life – while working full-time as a Navy/Marine Corps Medic.

In spite of a fear of heights and deep water, he performed high altitude, free-fall parachute jumps and hazardous diving ops in deep, open ocean water.

After 24 years of active duty, he retired in Asia.

Since then, he's been a full-time, single papa and actively pursuing his varied passions (Writing, Disruptive Technology, Computer Science and Cryptocurrency - plus more hobbies too boring or bizarre for most folk).

He lives on an island paradise with his teenage daughter, longtime girlfriend and three dogs.

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(More articles by JaiChai can be found on the Busy.org website. Use this link to visit Busy.org. Better yet, come join the Busy.org community!)

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"My mind was a terrible thing to waste..." - JaiChai