Following up with some thoughts I originally had in response to saulius' List of ways in which cost-effectiveness estimates can be misleading. Not sure if there has been other write ups of this effect.
If we incentivize charities' to act as cost-effectively as possible, and if they operate in coordination with other groups working on the same issue, it seems like we might expect in many cases what's best for an individual charities' cost-effectiveness to be bad for the overall cost-effectiveness of the space. This issue is compounded if multiple EA / highly cost-effective charities are operating in the same space.
The issue is something like, charities have relative strengths and weaknesses, and by coordinating to take advantage of those, individual charities might lose out on cost-effectiveness, but overall make their collective work more effective.
I think this occasionally actively happens with animal welfare campaigns, where single donors are giving to several charities doing the same thing.
An example using chicken welfare campaigns in the animal welfare space:
Charity A has 100 good volunteers in City 1, where Company X is headquartered. To run a successful campaign against them would cost Charity A $1000, and Company A uses 10M chickens. Alternatively, Charity A could run a campaign against Company Y in a different city where they have fewer volunteers for $1500 (more expensive because fewer volunteers).
Charity B has 5 good volunteers in City 1, but thinks they could secure a commitment from Company Y in City 2, where they have more volunteers, for $1000. Company B uses 1M chickens. Or, by spending more money, Charity B could secure a commitment from Company X for $1500.
Charities A and B are coordinating, and agree that Companies X and Y committing will put pressure on a major target (Company Z), and want to figure out how to effectively campaign.
They consider three strategies:
Strategy 1: They both campaign against both targets, at half the cost it would be for them to campaign on their own, and a charity evaluator views the campaign as split evenly between them, since they put in equal effort. The cost-effectiveness of each charity is: (5M + 0.5M Chickens / $500 + $750) = 4,400 chickens / dollar, and $2500 total has been spent.
Strategy 2: Charity A targets Company X, and Charity B targets Company Y. Charity A's cost-effectiveness is 10,000 chickens / dollar, and Charity B's is 1,000 chickens / dollar, with $2,000 total spent.
Strategy 3: Charity A targets Company Y, Charity B targets Company X. Charity A: 667 chickens / dollar, Charity B: 6696 chickens / dollar. $3,000 total spent across all charities.
These charities want to be as effective as possible — clearly, the charities should choose Strategy 2, because the least money will be spent overall (and both charities will spend less for the same outcome).
But if a charity evaluator is fairly influential, and looking at each charity individually, Charity B might push hard for less ideal Strategies 1 or 3, because those make its cost-effectiveness look much better. Strategy 2 is clearly the right choice for Charity B to make, but if they do, an evaluation of their cost-effectiveness will look much worse.
I guess a simple way of putting this is - if multiple charities are working on the same issue, and have different strengths relevant at different times, it seems likely that often they ought to make decisions that might look bad for their own cost-effectiveness ratings, but were the best thing to do / right decision to make.
I can think of a few examples where charities made less effective decisions explicitly due to reasoning about their own cost-effectiveness, and not thinking about coordination, but I'm not sure how prevalent this actually is as an issue. It mainly makes me a little worried about apples-to-apples comparisons of the cost-effectiveness of charities who do the same thing, and are known to coordinate with each other.