Editing Goodhart's law (section)

==Priority and background==
[[File:Charles Goodhart delives the 2012 Long Finance conference keynote speech.JPG|thumb|Charles Goodhart, for whom the adage is named, delivering a speech in 2012]]
Numerous concepts are related to this idea, at least one of which predates Goodhart's statement.<ref>{{Cite web |last=Manheim |first=David |date=29 September 2016 |title=Overpowered Metrics Eat Underspecified Goals |url=https://www.ribbonfarm.com/2016/09/29/soft-bias-of-underspecified-goals/ |access-date=26 January 2017 |website=ribbonfarm |language=en-US}}</ref> Notably, [[Campbell's law]] likely has precedence, as Jeff Rodamar has argued, since various formulations date to 1969.<ref>{{Cite journal |last=Rodamar |first=Jeffery |date=28 November 2018 |title=There ought to be a law! Campbell versus Goodhart |journal=Significance |volume=15 |issue=6 |page=9 |doi=10.1111/j.1740-9713.2018.01205.x |doi-access=free}}</ref> Other academics had similar insights at the time. [[Jerome Ravetz]]'s 1971 book ''[[Scientific Knowledge and Its Social Problems]]''<ref name="SK">{{Cite book | last = Ravetz | first=Jerome R. | title = Scientific knowledge and its social problems | publisher = Transaction Publishers | year=1971 |isbn=1-56000-851-2 |location=New Brunswick, New Jersey | pages=295–296 | oclc = 32779931 }}</ref> also predates Goodhart, though it does not formulate the same law. He discusses how systems in general can be gamed, focuses on cases where the goals of a task are complex, sophisticated, or subtle. In such cases, the persons possessing the skills to execute the tasks properly seek their own goals to the detriment of the assigned tasks. When the goals are instantiated as metrics, this could be seen as equivalent to Goodhart and Campbell's claim.

Shortly after Goodhart's publication, others suggested closely related ideas, including the [[Lucas critique]] (1976). As applied in [[economics]], the law is also implicit in the idea of [[rational expectations]], a theory in economics that states that those who are aware of a system of rewards and punishments will optimize their actions within that system to achieve their desired results. For example, if an employee is rewarded by the number of cars sold each month, they will try to sell more cars, even at a loss.

While it originated in the context of market responses, the law has profound implications for the selection of high-level targets in organizations.<ref name="Goodhart1975" /> [[Jon Danielsson]] states the law as

{{Blockquote|text=Any statistical relationship will break down when used for policy purposes.}}

And suggested a [[corollary]] for use in [[Financial risk modeling|financial risk modelling]]:

{{blockquote|text=A risk model breaks down when used for regulatory purposes.<ref>{{Cite journal | last=Daníelsson | first=Jón | date=July 2002 | title=The Emperor has no Clothes: Limits to Risk Modelling | journal=Journal of Banking & Finance | volume=26 | issue=7 |pages=1273–1296 | citeseerx=10.1.1.27.3392 | doi = 10.1016/S0378-4266(02)00263-7 }}</ref>}}

Mario Biagioli related the concept to consequences of using [[citation impact]] measures to estimate the importance of scientific publications:<ref>{{Cite journal |last=Biagioli |first=Mario |date=12 July 2016 |title=Watch out for cheats in citation game |url=https://escholarship.org/content/qt0b05p1j6/qt0b05p1j6.pdf |journal=Nature |volume=535 |issue=7611 |page=201 |bibcode=2016Natur.535..201B |doi=10.1038/535201a |pmid=27411599|doi-access=free }}</ref><ref>{{cite journal |last1=Varela |first1=Diego |last2=Benedetto |first2=Giacomo |last3=Sanchez-Santos |first3=Jose Manuel |title=Editorial statement: Lessons from Goodhart's law for the management of the journal |journal=European Journal of Government and Economics |date=30 December 2014 |volume=3 |issue=2 |pages=100–103 |doi=10.17979/ejge.2014.3.2.4299|s2cid=152551763 |url=https://revistas.udc.es/index.php/ejge/article/view/ejge.2014.3.2.4299 |access-date=8 February 2022|doi-access=free |hdl=2183/23376 |hdl-access=free }}</ref>

{{Blockquote
|text=All metrics of scientific evaluation are bound to be abused. Goodhart's law {{interp|...|orig=(named after the British economist who may have been the first to announce it)}} states that when a feature of the economy is picked as an indicator of the economy, then it inexorably ceases to function as that indicator because people start to game it.|title=|source=}}