Dollars and Jens
Sunday, June 24, 2007
social norms
Imagine that you have kids in a daycare and you need to pick up kids before 4 pm... Parents tend to come later and later, and the teacher wants to improve on that, so she gives a fine to parents that come more than 10 minutes late. The fine was about $2 in Israel for coming late. Before that, the social norm was to be on time, but when we made it some sort of market transaction, it became OK to be late. People think, "OK, if I'm late, it costs $2. I'm not violating social norms by being late." The effect of the fine was to make more parents come late. Before it was, ... [g]ood people don't come late. Now, suddenly if you pay $2, then it's fine to be late. You put a price on the social norm and the social norm is much weaker than it was before.

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