en.wikipedia.org/wiki/Goodhart%27s_law
2 corrections found
an economic theory that those aware of a system of rewards and punishments will optimize their actions within that system to achieve their desired results.
This misdefines rational expectations. In economics, rational expectations is about how people form forecasts using available information so they are not systematically wrong, not a theory that people optimize behavior within a reward-and-punishment system.
Full reasoning
Standard economics sources define rational expectations as a hypothesis about expectation formation and forecasting, not as a theory that people respond to incentives by optimizing inside a reward system.
- The Federal Reserve Bank of Richmond explains that the rational expectations hypothesis rests on the idea that discrepancies between expectations and outcomes are not systematic: people do not keep making the same forecasting mistakes, and they use available information to forecast future prices as well as possible.
- The Federal Reserve Bank of St. Louis similarly describes rational expectations as the assumption that agents have rational expectations about variables such as inflation and interest rates and therefore accurately forecast the dynamics of those variables.
So the article's wording confuses rational expectations with a broader idea about incentive-driven optimization. That broader idea may be related to strategic behavior or responses to incentives, but it is not the standard definition of rational expectations in economics.
2 sources
- Rational Expectations | Federal Reserve Bank of Richmond
The rational expectations hypothesis ... rests on the premise that any discrepancies between expectations and outcomes are not 'systematic.' ... Rational expectations theory does not assume that people have perfect foresight, but it does assume that decisionmakers ... do the best job possible forecasting the future with the information available to them now.
- Convergence to Rational Expectations in Learning Models: A Note of Caution | St. Louis Fed
A common assumption in economic models is that agents (households, firms, and governments) have rational expectations (RE) about these variables and thus accurately forecast the dynamics of the variables.
anthropologist Marilyn Strathern cited Hoskins expressing Goodhart's Law as "When a measure becomes a target, it ceases to be a good measure",
The cited scholar's name is wrong here. Strathern refers to Keith Hoskin, and the referenced 1996 chapter is authored by Keith Hoskin, not 'Hoskins.'
Full reasoning
This sentence misidentifies the scholar Strathern is citing.
In Strathern's 1997 paper, the passage that introduces the quote says "Hoskin describes this as 'Goodhart's law'"—without an s at the end of the surname. The chapter Strathern cites as the source is also cataloged as authored by Keith Hoskin. So the Wikipedia text should say Hoskin, not Hoskins.
2 sources
- ‘Improving ratings’: audit in the British University system (Marilyn Strathern, 1997)
When a measure becomes a target, it ceases to be a good measure... Hoskin describes this as 'Goodhart's law' ... which led in Hoskin's view to the modernist invention of accountability.
- The "awful idea of accountability" : inscribing people into the measurement of objects | WorldCat.org
Author : Keith Hoskin ... Publication : Accountability : power, ethos and the technologies of managing ... 1996