[The Rooster]

What you are describing is called siping, and is done to increse traction in mud, snow, wet, or otherwise low traction conditions. It's a process that was actually patented in 1923 by John F Sipe. The effect on fuel economy and tire wear have usually shown to be neutral, however handling on dry conditions can be compromised, making your tires feel squirmy or soft, which is why slicks are used in dry racing environments, and a lot of sport tires have very large tread blocks.