ECO331H1 Chapter Notes - Chapter Pay enough or don't pay at all: Intelligence Quotient, Motivation
Document Summary
Week 11: a fine is a price, gneezy and rustichini. Deterrence hypothesis: penalty that leaves everything else unchanged will reduce occurrence of behavior subject to the fine. However, penalties change information agent has, therefore potentially leading to opposite effect. Consider introducing fine to reduce number of parents that are late. Literature suggests that negative consequences on a behavior will produce reduction of that response. When negative consequence removed, discontinued behavior will reappear. Punishment most effective when severe and immediately follows behavior. Effectiveness tends to decrease over time if severity and other parameters of punishment left unchanged. Study 10 daycares, impose fines on 6 of them. Observe increase in late parents after introduction of fine. Stabilizes after 2-3 weeks at rate higher than in no-fine period. Number of late parents remains at same high level. Before, no precise consequence of being late, leading parents to form own beliefs and act accordingly. Was no policy as to what happened if parents late.
