During the British domination of India, the local government decided to fight the proliferation of cobras by offering cash rewards in exchange for dead ones, incentivizing people to kill them. This immediately started yielding results, before backfiring in the most spectacular way. People started breeding cobras, a much easier way to source dead cobras than to hunt wild ones. Learning about this, officials stopped the reward program at once. Upon this, cobra breeders were left with live cobras they couldn't kill and exchange for money anymore, so they released them from captivity into the cities, resulting in an overall increase of the cobra population, compared to what would have happened if the government had tried nothing.
The historicity of this anecdote is, however, debated. Researchers have had difficulty matching it with historical documents. Nonetheless, this gave another name to perverse incentives, which are often referred to as the **cobra effect**.
Perverse incentives happen when a reward offered as a motivation for a certain behavior creates an unintended or undesired one instead, because second order effect had not been taken into account or not foreseen when designing the reward system.
Another occurrence of the same phenomenon, backed by historical documents uncovered by Michael G. Vann this time, happened in Hanoï, Vietnam, then under the French government. To deal with the increasing population of rats, rewards were offered in exchange for rat tails. Soon enough, officials started noticing tailless rats around the city. Locals were catching them, cutting off their tails and releasing them into the sewers so they would reproduce and create more rats, and thus more tails.
A more modern example is that of social platforms. One would think the content that should be promoted is the content that generates the most interactions. However, this would lead to the proliferation of mature content, degrading the quality of the platform over time as well as overall usage in the process. This is something Twitch had to address while growing, as some ASMR streamers were producing less than equivocal content, hurting the platform's image.