People responding to incentives

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From Samuel Bowles's Microeconomics, Behavior, Institutions, and Evolution:
Consider the following case (Gneezy and Rustichini 2000). Parents everywhere are sometimes late picking up their children at day-care centers. In Haifa, at six randomly chosen centers, a fine was imposed for lateness (in a control group of centers, no fine was imposed). The expectation was that punctuality would improve. But parents responded to the fine by even greater tardiness. The fraction picking up their kids late more than doubled. Even more striking was the fact the when after sixteen weeks the fine was revoked, their enhanced tardiness persisted, showing no tendency to return to the status quo ante. Over the entire twenty weeks of the experiment, there were no changes in the degree of lateness at the day-care centers in the control group.

The authors of the study reason that the fine was a contextual cue, unintentionally providing information about the appropriate behavior. The effect was to convert lateness from the violation of an obligation that the parents were at some pains to respect, to a commodity with a price that many were willing to pay. They titled their study "A Fine is a Price" and concluded that imposing a fine labeled the interaction as a market-like situation, one in which parents were more than willing to buy lateness. Revoking the fine did not restore the initial framing of punctuality as an obligation, it just lowered the lateness to zero.

Another case in which people frame the problem this way is speeding. Many people regard speeding tickets as a tax on driving fast, not an indication that they've done anything wrong. Indeed, they often resent the "slow down" lectures provided by the police more than the fine.

For discussion: Drunk driving was once regarded in much the same way as speeding, but after a concerted PR campaign (by MADD, especially) it's now widely considered to be wrong. If you actually cared about reducing driver's speeds (I don't) would a similar campaign be likely to work better than more vigorous enforcement?

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4 Comments

Conversely, if the parents in this study were given a 'talking to' in addition to the fine each time they were late, perhaps the outcome would have been different?


Another case in which people frame the problem this way is speeding. Many people regard speeding tickets as a tax on driving fast, not an indication that they've done anything wrong.

Highlighting this are signs placed (or that used to be placed) on the major highways at the entrances to Pennsylvania. I called them "menus", in that they listed speeds and fines, side by side. So you could pick how much you were willing to risk, and decide how fast you wanted to drive. In this case, it's not a direct payment, as with the day-care centers, but more of a wager, since the imposition of the fine is uncertain.

Andrew:

I am directly familiar with this sort of child-care fine system. One way to make it work is to make the fine large, and to back it with social disopprobrium when it *is* enforced. In our 'hood, the fine is $1.00 per minute in the two facilities I am aware of, and the folks who do the enforcing (wisely) give you that disapproving look that only parents, teachers and child-care workers have truly mastered. Of course, if there are truly extenuating circumstances, the rules are simply not enforced (analogous to a cop letting you off with a warning).

I'd like to know more about the size of the Haifa fines, and the degree of "connectedness" among the communities involved. My conjecture is that the fine is small and that the communities are not tightly-meshed.

(It's been a loong while since I looked at any (non-TCP/IP!) network theory, so excuse any terminilogical sloppiness, please)

I think a MADD-style campaign against speeding could be successful, but speed limits would need to be adjusted upwards from where they are currently (just talking about highways -- surface roads I think you can convince people of the danger to pedestrians). Lots of interesting basic information at

http://www-nrd.nhtsa.dot.gov/pdf/nrd-30/NCSA/TSF2003/809771.pdf

but some obvious follow-on stuff not included in there: death rate and cost associated with accidents with speeding involved *controlled for use of alcohol*. That is, how big of a problem is speeding if you are not in fact drunk while speeding? Looks from the statistics like only about 15% of accidents involving speeding do not also involve alcohol. I bet there's a similar graph to be plotted showing accident seriousness, where most of those 15% are towards the "less serious" end of the spectrum.

Also, while the overall incidence of speeding-related fatalities has increased since 1993, it sure doesn't look like that increase is keeping up with population growth -- ie it looks like car resilience to speeding-related accidents is improving over that time period.

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