HELLO.
"Contrariwise," continued Tweedledee, "if it was so, it might be; and if it were so, it would be; but as it isn't, it ain't. That's logic." Through the Looking-Glass; Lewis Carroll
| Hello. | Goodbye. |
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Through the Looking-Glass; Lewis Carroll |
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Saturday, December 30, 2006, 10:20 PM
Two economists did a study on a couple of daycare centres in Isreal (no, this isn't about any sort of discrimination, for those convulsed and confused at all the hate today:) The thing was that, very often, parents turned up late to pick up the kids. So many a day, ended with a bunch of very anxious kids and a worried teacher or two to come pick them up. The economists monitered the number of parents who came late. On average, there were eight late pick-ups per week per daycare centre. So they came up with a solution- fine the tardy parents. Nice. For arrival more than 10 minutes late, a parent had to have another $3 added to the daycare fee. After all, why should the teachers who took care of the kids more than they were paid, even babysit them extra for free? The economists thought that FINE = LESS TARDY PARENTS = LESS KIDS GOING HOME LATE = LESS TEACHERS STAYING= THE PERFECT SOLUTION Jackpot. Surprise, SURPRISE, indeed. After the implementing of the fine, the economists monitored that the number of tardy parents went..... up. The incentive had backfired. After much thought, the economists came up with an explanation. $3 had been MUCH TOO LITTLE. For that price, a parent with one child could arrive late for a month and only have to pay $90+/-. Not very much, and certainly peanuts compared to the original fee. So what if the fine had been $100? Oh yes, that would certainly have put an end to the late pickups, and it would also have endangered plenty of ill-will (read: "court cases". "bad reputation") But there was also another problem. It substituted an economic incentive ($3 fine) for a moral incentive (the guilt that parents were supposed to feel when they arrived late). So for just $3 a day, parents could buy off their guilt. Further more, the small size of the fine sent a signal to the parents that late pickups weren't such a big proble. If the daycare centre only suffered $3 of pain for each late parent arrival, why bother to stop the movie in the DVD player? So the economists eliminated the fine..... And... TADAHH!! *Scenario: Parents feeling guilty again* *Big red cross appears and x-es the scenario out* Guilty my ***. Now the parents could arrive late, pay no fine, and feel no guilt. An up-to-deal-must-grab package. Those poor kids. Such is the power of incentives. Another one. In the 1970s, a team of economists decided to study moral incentive vs. economic incentive. So they went and studied the motivation behind blood donations. Heh. Their discovery: When people were given a small stipend for a blood donation instead of being praised for their altruism, they tend to donate less blood. Why? The stipend turned a noble act of charity into a painful way to make a few extra bucks. Ow. Not worth it. So what if the fine had been raised to.. let's say, $5000 per litre of blood donated? Certainly the number of donors would increase dramatically? Well... possible. And something else would also have increased as well. Every incentive will have a dark side. In this case, people might have stolen blood at knifepoint. Literally. And may have passed off blood from goodness-knows-what as their own. Or come up with fake documents to pass blood donation limits. All to earn $5000. So, whatever the incentive, people will somehow find a way around. The above passage was adapted from Chapter 1 of "Freakonomics" by Steven D. Levitt and Stephen J. Dubner. As they go, things are not what they appear to be. Thank you, Father, for giving me this book:) P/S: My computer has somehow stopped being able to support chinese type. *^#!@!% |