Off the Mark: The Pitfalls of Metrics Gaming in AI Progress Races

One of my favorite cautionary tales of misaligned incentives is the urban legend of the Soviet nail factory. As the story goes, during a nail shortage in Lenin’s time, Soviet factories were given bonuses for the number of nails produced. Hearing this, the factories reacted by making tiny, useless nails to inflate their output. The regime then pivoted to bonus payouts based on nail tonnage shipped per month — so the factories simply started producing giant, overly heavy nails that …

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