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Discover how well-intended incentives can backfire through the story of the great Hanoi rat hunt – a lesson in unintended consequences.

In Episode 238 of Anecdotally Speaking, Shawn shares the infamous story of the Hanoi Rat Hunt, a French colonial initiative in 1902 that aimed to curb the city’s rat problem. The government incentivised locals to turn in rat tails for payment, but the plan quickly spiralled out of control.

Mark and Shawn explore how incentives, when poorly designed, can lead to unintended and often disastrous outcomes. Shawn also shares a personal childhood experience of unintended incentives, and reflects on how businesses and governments frequently fall into the same trap.

This story is perfect for illustrating the importance of thinking through incentive structures, behavioural economics, and how people will always find ways to game the system.

For your story bank

Tags: Storytelling, Incentives, Behaviours, Politics, Strategy, Rules

This story starts at 0:30

Back in 1902, the French colonial government in Hanoi was facing a serious rat problem. They had recently installed a modern sewer system, but rather than improving the city, it had turned into a perfect breeding ground for rats. Worse still, these rats were carrying the plague, posing a major health crisis.

Looking for a quick fix, officials devised a simple incentive: they would pay locals for every rat tail they turned in. The logic was clear—if people were rewarded for killing rats, the population would decline.

At first, the plan seemed to work. Thousands of tails were collected, and the government assumed their problem was being solved. But as time went on, they realised something wasn’t adding up. The rat population wasn’t going down. In fact, it was growing.

A deeper investigation revealed people were cutting off the rats’ tails but then releasing them back into the sewers so they could continue breeding. That way, there would always be more rats to harvest tails from. Even more astonishingly, some entrepreneurial citizens had started breeding rats specifically to cut off their tails and claim the bounty.

The program was a complete failure. Instead of reducing the rat population, it had only encouraged people to sustain and expand it. Eventually, the policy was scrapped, but by then, the number of rats in Hanoi had skyrocketed.