── ── Mental model
Goodhart's Law
Goodhart's Law: when a metric controls behavior, people optimize the metric rather than the underlying goal. Formulated by economist Charles Goodhart (1975) on UK monetary policy; sharpened by Marilyn Strathern (1997): "When a measure becomes a target, it ceases to be a good measure." Four failure mechanisms (Manheim & Garrabrant 2018): Regressional, Extremal, Causal, Adversarial. Countermeasure is always multi-metric +…
How it works
Step 1 — State metric and goal: metric being targeted / underlying goal / current proxy-goal correlation / who is measured / stakes.
Step 2 — Predict the gaming: list ≥3 ways to game the metric with minimum effort on the goal. If you can't list 3, you haven't thought hard enough.
· Mechanism · Test · · --- · --- · · Regressional · Is there noise that optimization will push into? · · Extremal · Does metric-goal correlation break at extremes? · · Causal · Is the metric a symptom, not a cause? · · Adversarial · Will agents actively game with intelligence? ·
When to use it
- our KPI is going up but the real outcome isn't improving
- people seem to be gaming the metric
- we're about to tie bonuses or promotions to a number
- an algorithm is producing results nobody intended
- a test or audit system is being designed
When not to use it
When the decision is routine and reversible, applying a formal method costs more than it returns.
Worked example
Goodhart 1975 (M3) and Strathern 1997 (RAE)
The empirical foundation has two key moments. The first is Charles Goodhart's 1975 critique of UK monetary policy, originally a conference paper for the Reserve Bank of Australia, later expanded in his 1984 book Monetary Theory and Practice.
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