Fines Can Make “Bad” Behavior Happen More Often (Instead Of Less Often)

From an article on daycares and late fees

The fines that most child-care centres now charge – typically $1 per minute – to discourage adults from being tardy may actually promote lateness, researchers have found.

“Certain cues can switch moral behaviour on or off,” says Samuel Bowles, director of the Behavioural Sciences Program at the Santa Fe Institute in New Mexico. “Charging for things often switches off moral behaviour.”

Bowles concluded that fines can undermine a parent’s sense of ethical obligation to be on time for the teachers. And lateness becomes “just another commodity” to purchase.

Bowles’s research assigns a moral measure to the incentive principle raised in Freakonomics, which cited a groundbreaking study on daycare fines in Israel. Shortly after six centres in Haifa began charging late parents, the experiment backfired spectacularly. Parents reacted by coming even later.

If you are interested in reading the paper this is based on it is "A Fine is a Price", by Uri Gneezy and Aldo Rustichini.

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