5 ms·

It goes a bit further than that - you're asking people to make the shift from a non-monetary transaction to a monetary (quantifiable) transaction. This shift is

It goes a bit further than that - you're asking people to make the shift from a non-monetary transaction to a monetary (quantifiable) transaction. This shift is one-way; once you get people thinking in monetary terms, it's very hard to get them to stop[0]. Dan Ariely talks about this in Predictably Irrational, and he gives a great example of this involving an Israeli daycare center: http://www.npr.org/2008/03/31/89233955/dan-ariely-takes-on-irrational-economic-impulses http://www.npr.org/2008/03/31/89233955/dan-ariely-takes-on-i... [0] Of course, you could make the argument that this principle applies on a corporate scale, not just a personal one, which is the point of TFA - Ariely's study just happens to focus on the individual.

JaggedJax 13y ago
Here's another example of the perils of going from free to paid and why many U.S. WWII soldiers still resent the Red Cross: http://www.npr.org/blogs/money/2012/07/13/156737801/the-cost-of-free-doughnuts-70-years-of-regret http://www.npr.org/blogs/money/2012/07/13/156737801/the-cost...
- LanceH 13y ago
  I would say at least as important is that the sodas disappeared without any input from the people using them. It's a cut of a very small benefit, but it is still a cut. To do this without any prior discussion from the people receiving the benefit will only be taken badly.
YZF 13y ago
I'm not sure market norms vs. social norms apply here (as long as money isn't explicitly mentioned) but it's definitely a shift in the relationship. The "free" stuff is a signal that the company cares about you and when it's taken away you feel like they no longer care. The other thing that happens here is loss aversion. Losing that "free" coffee or soda is painful.
geon 13y ago
The relevant text: A few years ago, they studied a day care center in Israel to determine whether imposing a fine on parents who arrived late to pick up their children was a useful deterrent. Uri and Aldo concluded that the fine didn't work well, and in fact it had long-term negative effects. Why? Before the fine was introduced, the teachers and parents had a social contract, with social norms about being late. Thus, if parents were late — as they occasionally were — they felt guilty about it — and their guilt compelled them to be more prompt in picking up their kids in the future. (In Israel, guilt seems to be an effective way to get compliance.) But once the fine was imposed, the day care center had inadvertently replaced the social norms with market norms. Now that the parents were paying for their tardiness, they interpreted the situation in terms of market norms. In other words, since they were being fined, they could decide for themselves whether to be late or not, and they frequently chose to be late. Needless to say, this was not what the day care center intended.
- frogpelt 13y ago
  The result of that discovery is that day care centers now charge about $100 per child, per hour that the parent is late.
  - mbreese 13y ago
    Right, but I might make the determination that I'm willing to pay that extra on a given day. If that's the market price for it, then I get to say if I'm willing to pay that price. And now my kids' teacher has to stay an hour later. But if it was just a social contract keeping me from picking my kids up late, I'd feel guilty about it and make sure that it didn't happen again. And the teacher might only have to stay a few minutes later. In my case, I know that my kids' daycare will charge me if I pick them up late. But I don't know what the fee is, and I don't know if they've ever told me. I don't care... I'm not going to pick them up late (I've been close), because I know their teachers have other things to do, and I consider it rude. If I knew it was $50/hour or $100/hour, if I was working hard on somethings, I, on occasion, may have chosen to be late. Social contracts are tougher to break than market based contracts.

JaggedJax 13y ago

Here's another example of the perils of going from free to paid and why many U.S. WWII soldiers still resent the Red Cross: http://www.npr.org/blogs/money/2012/07/13/156737801/the-cost-of-free-doughnuts-70-years-of-regret http://www.npr.org/blogs/money/2012/07/13/156737801/the-cost...

LanceH 13y ago
I would say at least as important is that the sodas disappeared without any input from the people using them. It's a cut of a very small benefit, but it is still a cut. To do this without any prior discussion from the people receiving the benefit will only be taken badly.

YZF 13y ago

I'm not sure market norms vs. social norms apply here (as long as money isn't explicitly mentioned) but it's definitely a shift in the relationship. The "free" stuff is a signal that the company cares about you and when it's taken away you feel like they no longer care. The other thing that happens here is loss aversion. Losing that "free" coffee or soda is painful.

geon 13y ago

The relevant text: A few years ago, they studied a day care center in Israel to determine whether imposing a fine on parents who arrived late to pick up their children was a useful deterrent. Uri and Aldo concluded that the fine didn't work well, and in fact it had long-term negative effects. Why? Before the fine was introduced, the teachers and parents had a social contract, with social norms about being late. Thus, if parents were late — as they occasionally were — they felt guilty about it — and their guilt compelled them to be more prompt in picking up their kids in the future. (In Israel, guilt seems to be an effective way to get compliance.) But once the fine was imposed, the day care center had inadvertently replaced the social norms with market norms. Now that the parents were paying for their tardiness, they interpreted the situation in terms of market norms. In other words, since they were being fined, they could decide for themselves whether to be late or not, and they frequently chose to be late. Needless to say, this was not what the day care center intended.

frogpelt 13y ago
The result of that discovery is that day care centers now charge about $100 per child, per hour that the parent is late.
- mbreese 13y ago
  Right, but I might make the determination that I'm willing to pay that extra on a given day. If that's the market price for it, then I get to say if I'm willing to pay that price. And now my kids' teacher has to stay an hour later. But if it was just a social contract keeping me from picking my kids up late, I'd feel guilty about it and make sure that it didn't happen again. And the teacher might only have to stay a few minutes later. In my case, I know that my kids' daycare will charge me if I pick them up late. But I don't know what the fee is, and I don't know if they've ever told me. I don't care... I'm not going to pick them up late (I've been close), because I know their teachers have other things to do, and I consider it rude. If I knew it was $50/hour or $100/hour, if I was working hard on somethings, I, on occasion, may have chosen to be late. Social contracts are tougher to break than market based contracts.