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It may could encourage people to contact him more by giving them a form of permission: > To come to our surprising conclusion, Uri ran an experiment: Out of 10

It may could encourage people to contact him more by giving them a form of permission: > To come to our surprising conclusion, Uri ran an experiment: Out of 10 daycare centers across Haifa, they randomly chose six and introduced a small fine for parents who showed up more than 10 minutes late in each of them. In day cares where the fine was introduced, parents immediately started showing up late, with tardiness levels eventually leveling out at about twice the pre-fine level. That is, introducing a fine caused twice as many parents to show up late. What about the remaining four day care centers that remained fine-free? Tardiness didn’t change at all Source: http://freakonomics.com/2013/10/23/what-makes-people-do-what-they-do/ http://freakonomics.com/2013/10/23/what-makes-people-do-what...

huac 10y ago
Parents can always show up late, not everyone has Ben Horowitz's email. This isn't a question of motivation but rather a question of access. To the 4 downvotes: what's his email? What's the relevance of the comment I replied to?
fossuser 10y ago
I think the worst part was that even when the fine was removed the levels did not revert to what they were previously. Once a monetary penalty takes the place of a social one it is hard to get the social one back.
treebeard901 10y ago
Incentives for behavior modification is always a fascinating area. In this case, the daycare was incentivized to track people being late more closely since they had a financial interest in doing so. I suspect the outcome was somewhere in the middle of more accurate record keeping and introducing the ability for the parents to pay off their guilt.
- Swizec 10y ago
  It also made the behavior socially acceptable. "So many people are late that we introduced a fine" "Oh phew, it's not just me. Everyone's doing it"
  - ionwake 10y ago
    Bingo
  - netsharc 10y ago
    But also, you'd feel guilty for making people wait for you, but with this you'd just think "Oh I won't make it in time, but no worries, it's just 5 more dollars [or whatever the rate is]."
  - elastic_church 10y ago
    also turns into a cost benefit equation, instead of a mere cultural/etiquette one
- panic 10y ago
  It presents a choice where there wasn't one before. Without the fine, most people wouldn't even consider choosing to be late. In general, people tend to choose from the options in front of them, so paying attention to the options you provide is very important.
mindingdata 10y ago
We've seen this come up a lot recently with Tesla's move to fine drivers who "park" at charging stations. Many see this as actually worsening the problem as people are happier to pay the (relatively small) fine.
- stouset 10y ago
  I'd read both this article as well as the one about Tesla, but it never would have occurred to me to connect the two! So many aspects of behavioral economics seem counterintuitive at first (introducing penalties increases rule-breaking) but are obvious in hindsight (monetary penalties appear to reframe a calculation away from social decision-making toward economic decision-making, which can change the participants' conclusions toward the penalty)!
- the_watcher 10y ago
  If the problem is people leaving their car there for hours, is a $24/hr fine really that small? Yea, it might increase the number of people who leave their car there for 10 extra minutes, but it seems highly likely to address the real problem, which is low turnover at the Superchargers. Even then, Tesla can very easily just increase the fine (or do something like a steadily increasing fine) to address this concern. They could also charge additional fees to anyone who leaves their car at a supercharger for too long serially (and my guess is that these are the real problem).
  - jrowley 10y ago
    Maybe they should setup an overage amount - e.g. 1 hour / month that you're allowed to park for free. After that every hour that you charge results in warning letters etc. eventually you aren't allowed to charge at any of the stations. Probably a little extreme but might work.
    - the_watcher 10y ago
      Yea, if, as seems to be the crux of one criticism of the policy, is that it allows bad actors to simply pay for the privilege of their bad actions, penalties that scale to extreme quickly is probably the best method. It's unfortunate, since the (very large majority) of good actors are also at risk of punishment.
leesalminen 10y ago
Wow, what a great article! I work in the doggy daycare space. I had assumed this to be true for a long time but never had any evidence showing it to be true. This is why I love HN!
lkbm 10y ago
While I've always loved this anecdote, and it may be true, I seem to recall some flaws being found in this particular study. That said, I can't back up my memory with sources--there are some 1600 citations of "A Fine is a Price", and no stand-out "this has been refuted" reference showing up at a glance. :-/
amlozano 10y ago
I'd really like to see this study re-done with multiple fine sizes. My intuition is that monetary repercussion is valued smaller than the social repercussion. There might even be a optimal fine level to make profit off the tardy parents.
lastofus 10y ago
I'm curious what the fine level was relative to the income of the parents, and if the fine was viewed more as a convenience fee than a penalty. I'm thinking if the fine was raised to a high enough dollar amount, tardiness would again drop off, or at the very least, revenue would increase enough to justify hiring someone to stay late...
- toomuchtodo 10y ago
  I don't think income plays into it. It converts the transaction of one of spending social capital (social mores, trust) to financial capital; social capital, IMHO, is harder to acquire, therefore far more valuable. Anyways, because you asked: http://rady.ucsd.edu/faculty/directory/gneezy/pub/docs/fine.pdf http://rady.ucsd.edu/faculty/directory/gneezy/pub/docs/fine.... "It is true that a ‘‘large enough’’ fee would eventually reduce the behavior. For instance, many day-care centers in the United States clearly announce a fee for coming late at the start of the year, and this fee is large and proportional to the length of the delay. The resulting penalty is more severe for the average delay than the nonlinear fine we introduced in our study, even after adjusting for difference in prices and incomes in the two countries. Casual observation shows that there are few delays, but we have not examined if the average delay is different from the one in our sample. Comparing the two systems would be an interesting research project."
  - smokey_the_bear 10y ago
    The daycares my kids have gone to have all charged a moderate late fee, but said very explicitly that if you are habitually late, you will be kicked out of the daycare. One of the daycares at 5:30 would just take the kids with her on her nightly errands, and you'd have to run all over town to find them at the grocery store or whatever. These are both ways of making it clear that it is socially unacceptable to be late.
  - ytjohn 10y ago
    The daycare we enrolled our kid at has a $12 fee for every 15 minutes past their closing time. I think that's priced steep enough to discourage, and also on par with having to pay two adults to stay later (they have a two adults with the children at all times policy).
whack 10y ago
In the experiment you mentioned, the fine is small enough, that it doesn't produce any significant revenues. The goal is to minimize the number of people who show up late. Imagine if the day-care made the "fine" high enough that they actually want people to show up late. Ie, think credit-card interest rates and late-payment fees. In that case, regardless of whether tardiness goes up-or-down, the daycare would win either way. Let's compare this to Ben Horowitz' situation. Imagine if it takes him 5 minutes to read and send a cookie-cutter response. That works out to a hourly rate of $240/hour. Even for a VC, that's a pretty damn good hourly rate. If Ben stops getting spammed by people, I think he'd be perfectly happy with that. If he were to get flooded by spammers willing to pay him $500k/year to send cookie-cutter responses, I think he'd be ok with that as well. It's a win-win for him.
- bhouston 10y ago
  > That works out to a hourly rate of $240/hour. That is a horrible for a VC, especially for one as successful as Ben.
  - adventured 10y ago
    Ten times that wouldn't be worth it, if it distracts from a single other important task. Assume $2400 / hour, six hours per day of effort on it, five days per week, 52 weeks per year. $3.7 million. It's a lot to a charity, it's not a lot versus his net worth and what he can do with his time at A16Z, against the distraction of writing emails for that effort every 5 minutes (which is why he won't continue with this long-term; he'll make a splash with it, get the headlines, do a good deed with the donated funds, and be on to the next thing, which isn't writing emails for $5/$20/$50).
    - notahacker 10y ago
      Andreessen Horowitz put $25m into the B series for the company running this service, which puts a different complexion on the ROI he's hoping to get from answering a handful of emails in his free time... tbh I wouldn't be that surprised if some of the companies willing to spend $20 to exchange emails with Ben Horowitz are actually worth his time replying to, especially if he has a PA he trusts to decide which emails are worth him having a look at.
throwaway2016a 10y ago
My child's daycare charges $1 a minute for being late. But there is a bit of a grace period. When we are three minutes late they don't even bother to record it.
danso 10y ago
Sounds similar to the Catholic concept of "indulgences". Wonder if sinful actions increased considerably after people had a monetary way to avoid hell.
FLGMwt 10y ago
It almost certainly does. He started at $5.

huac 10y ago

Parents can always show up late, not everyone has Ben Horowitz's email. This isn't a question of motivation but rather a question of access. To the 4 downvotes: what's his email? What's the relevance of the comment I replied to?

fossuser 10y ago

I think the worst part was that even when the fine was removed the levels did not revert to what they were previously. Once a monetary penalty takes the place of a social one it is hard to get the social one back.

treebeard901 10y ago

Incentives for behavior modification is always a fascinating area. In this case, the daycare was incentivized to track people being late more closely since they had a financial interest in doing so. I suspect the outcome was somewhere in the middle of more accurate record keeping and introducing the ability for the parents to pay off their guilt.

Swizec 10y ago
It also made the behavior socially acceptable. "So many people are late that we introduced a fine" "Oh phew, it's not just me. Everyone's doing it"
- ionwake 10y ago
  Bingo
- netsharc 10y ago
  But also, you'd feel guilty for making people wait for you, but with this you'd just think "Oh I won't make it in time, but no worries, it's just 5 more dollars [or whatever the rate is]."
- elastic_church 10y ago
  also turns into a cost benefit equation, instead of a mere cultural/etiquette one
panic 10y ago
It presents a choice where there wasn't one before. Without the fine, most people wouldn't even consider choosing to be late. In general, people tend to choose from the options in front of them, so paying attention to the options you provide is very important.

mindingdata 10y ago

We've seen this come up a lot recently with Tesla's move to fine drivers who "park" at charging stations. Many see this as actually worsening the problem as people are happier to pay the (relatively small) fine.

stouset 10y ago
I'd read both this article as well as the one about Tesla, but it never would have occurred to me to connect the two! So many aspects of behavioral economics seem counterintuitive at first (introducing penalties increases rule-breaking) but are obvious in hindsight (monetary penalties appear to reframe a calculation away from social decision-making toward economic decision-making, which can change the participants' conclusions toward the penalty)!
the_watcher 10y ago
If the problem is people leaving their car there for hours, is a $24/hr fine really that small? Yea, it might increase the number of people who leave their car there for 10 extra minutes, but it seems highly likely to address the real problem, which is low turnover at the Superchargers. Even then, Tesla can very easily just increase the fine (or do something like a steadily increasing fine) to address this concern. They could also charge additional fees to anyone who leaves their car at a supercharger for too long serially (and my guess is that these are the real problem).
- jrowley 10y ago
  Maybe they should setup an overage amount - e.g. 1 hour / month that you're allowed to park for free. After that every hour that you charge results in warning letters etc. eventually you aren't allowed to charge at any of the stations. Probably a little extreme but might work.
  - the_watcher 10y ago
    Yea, if, as seems to be the crux of one criticism of the policy, is that it allows bad actors to simply pay for the privilege of their bad actions, penalties that scale to extreme quickly is probably the best method. It's unfortunate, since the (very large majority) of good actors are also at risk of punishment.

leesalminen 10y ago

Wow, what a great article! I work in the doggy daycare space. I had assumed this to be true for a long time but never had any evidence showing it to be true. This is why I love HN!

lkbm 10y ago

While I've always loved this anecdote, and it may be true, I seem to recall some flaws being found in this particular study. That said, I can't back up my memory with sources--there are some 1600 citations of "A Fine is a Price", and no stand-out "this has been refuted" reference showing up at a glance. :-/

amlozano 10y ago

I'd really like to see this study re-done with multiple fine sizes. My intuition is that monetary repercussion is valued smaller than the social repercussion. There might even be a optimal fine level to make profit off the tardy parents.

lastofus 10y ago

I'm curious what the fine level was relative to the income of the parents, and if the fine was viewed more as a convenience fee than a penalty. I'm thinking if the fine was raised to a high enough dollar amount, tardiness would again drop off, or at the very least, revenue would increase enough to justify hiring someone to stay late...

toomuchtodo 10y ago
I don't think income plays into it. It converts the transaction of one of spending social capital (social mores, trust) to financial capital; social capital, IMHO, is harder to acquire, therefore far more valuable. Anyways, because you asked: http://rady.ucsd.edu/faculty/directory/gneezy/pub/docs/fine.pdf http://rady.ucsd.edu/faculty/directory/gneezy/pub/docs/fine.... "It is true that a ‘‘large enough’’ fee would eventually reduce the behavior. For instance, many day-care centers in the United States clearly announce a fee for coming late at the start of the year, and this fee is large and proportional to the length of the delay. The resulting penalty is more severe for the average delay than the nonlinear fine we introduced in our study, even after adjusting for difference in prices and incomes in the two countries. Casual observation shows that there are few delays, but we have not examined if the average delay is different from the one in our sample. Comparing the two systems would be an interesting research project."
- smokey_the_bear 10y ago
  The daycares my kids have gone to have all charged a moderate late fee, but said very explicitly that if you are habitually late, you will be kicked out of the daycare. One of the daycares at 5:30 would just take the kids with her on her nightly errands, and you'd have to run all over town to find them at the grocery store or whatever. These are both ways of making it clear that it is socially unacceptable to be late.
- ytjohn 10y ago
  The daycare we enrolled our kid at has a $12 fee for every 15 minutes past their closing time. I think that's priced steep enough to discourage, and also on par with having to pay two adults to stay later (they have a two adults with the children at all times policy).

whack 10y ago

In the experiment you mentioned, the fine is small enough, that it doesn't produce any significant revenues. The goal is to minimize the number of people who show up late. Imagine if the day-care made the "fine" high enough that they actually want people to show up late. Ie, think credit-card interest rates and late-payment fees. In that case, regardless of whether tardiness goes up-or-down, the daycare would win either way. Let's compare this to Ben Horowitz' situation. Imagine if it takes him 5 minutes to read and send a cookie-cutter response. That works out to a hourly rate of $240/hour. Even for a VC, that's a pretty damn good hourly rate. If Ben stops getting spammed by people, I think he'd be perfectly happy with that. If he were to get flooded by spammers willing to pay him $500k/year to send cookie-cutter responses, I think he'd be ok with that as well. It's a win-win for him.

bhouston 10y ago
> That works out to a hourly rate of $240/hour. That is a horrible for a VC, especially for one as successful as Ben.
- adventured 10y ago
  Ten times that wouldn't be worth it, if it distracts from a single other important task. Assume $2400 / hour, six hours per day of effort on it, five days per week, 52 weeks per year. $3.7 million. It's a lot to a charity, it's not a lot versus his net worth and what he can do with his time at A16Z, against the distraction of writing emails for that effort every 5 minutes (which is why he won't continue with this long-term; he'll make a splash with it, get the headlines, do a good deed with the donated funds, and be on to the next thing, which isn't writing emails for $5/$20/$50).
  - notahacker 10y ago
    Andreessen Horowitz put $25m into the B series for the company running this service, which puts a different complexion on the ROI he's hoping to get from answering a handful of emails in his free time... tbh I wouldn't be that surprised if some of the companies willing to spend $20 to exchange emails with Ben Horowitz are actually worth his time replying to, especially if he has a PA he trusts to decide which emails are worth him having a look at.

throwaway2016a 10y ago

My child's daycare charges $1 a minute for being late. But there is a bit of a grace period. When we are three minutes late they don't even bother to record it.

danso 10y ago

Sounds similar to the Catholic concept of "indulgences". Wonder if sinful actions increased considerably after people had a monetary way to avoid hell.

FLGMwt 10y ago

It almost certainly does. He started at $5.