Defection Tax Framework
Mechanisms that make one-sided value extraction so costly it becomes irrational.
Mechanisms that make one-sided value extraction so costly it becomes irrational. Biology doesn't prevent cheating through contracts - it makes cheating so costly that natural selection eliminates cheaters. Organizations need equivalent enforcement.
When to Use Defection Tax Framework
When designing enforcement mechanisms for partnerships, diagnosing why partnerships are failing due to exploitation, or strengthening existing partnership governance.
How to Apply
Reciprocity Engine Design
Create systems tracking balanced exchange in real-time, like client fish detecting cleaner cheating.
Questions to Ask
- What metrics track whether both parties contribute proportionally?
- How frequently is reciprocity assessed?
- What visibility exists into partner contributions?
Outputs
- Reciprocity metrics
- Tracking dashboard
- Review cadence
Performance Accountability
Establish clear expectations and consequences for underperformance.
Questions to Ask
- What service level agreements exist?
- What financial consequences exist for underperformance?
- What escalation procedures address disputes?
Outputs
- SLA definitions
- Penalty structures
- Escalation procedures
Reputation and Repeated Game Dynamics
Emphasize long-term relationship value exceeding short-term opportunism gains.
Questions to Ask
- How does performance history affect future opportunities?
- What reputation effects exist in your industry?
- How is the long-term relationship value communicated?
Outputs
- Reputation tracking system
- Long-term value analysis
Interdependence Design
Create genuine specialization and mutual dependency that makes defection self-defeating.
Questions to Ask
- What relationship-specific investments create switching costs?
- What joint capabilities are difficult to replicate with alternatives?
- How are both parties' fates linked?
Outputs
- Interdependence map
- Switching cost analysis
Transparency Mechanisms
Reduce information asymmetries that enable exploitation.
Questions to Ask
- What shared dashboards or metrics exist?
- How is real-time data shared?
- What prevents hiding problems or misrepresenting facts?
Outputs
- Transparency tools
- Data sharing protocols