Second-order Effect

A second-order effect is an effect that happens because of an earlier outcome, decision, action, or system condition.

It is not always the first thing a system produces.

It is what begins to happen next.

A second-order effect may appear after people respond to a metric, adapt to a rule, work around a constraint, absorb a tradeoff, or change their behavior to survive inside the system.

Second-order effects matter because systems do not stop at their first visible result.

An outcome can become a new condition.

That new condition can then shape behavior, decisions, incentives, expectations, and future outcomes.

The question is not only:

What happened?

The better question is:

What did that outcome make more likely next?