A Fine is a Price
Abstract
The deterrence hypothesis predicts that the introduction of a penalty that leaves everything else unchanged will reduce the occurrence of the behavior subject to the fine. We present the result of a field study in a group of day‐care centers that contradicts this prediction. Parents used to arrive late to collect their children, forcing a teacher to stay after closing time. We introduced a monetary fine for late‐coming parents. As a result, the number of late‐coming parents increased significantly. After the fine was removed no reduction occurred. We argue that penalties are usually introduced into an incomplete contract, social or private. They may change the information that agents have, and therefore the effect on behavior may be opposite of that expected. If this is true, the deterrence hypothesis loses its predictive strength, since the clause “everything else is left unchanged” might be hard to satisfy.
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When people misconstrue the meaning of an incentive, it can backfire.
“When people misconstrue the meaning of an incentive, it can backfire.”
From Stories in Action. (2022) · cites this paper as Gneezy & Rustichini, 2000
Parents interpreted the day-care fine as a price, feeling more comfortable paying to arrive late once the fine was introduced.
“The parents, the authors argue, interpreted the fine as a price. Parents did not feel comfortable taking advantage of teachers’ patience, but once the fine was introduced, they felt more comfortable paying to arrive late (Gneezy & Rustichini, 2000).”
From Stories in Action. (2022) · cites this paper as Gneezy & Rustichini, 2000
In a study from Israel, when randomly selected day cares introduced a fine to discourage parents from arriving late, parents arrived even later than they did at day cares in the control group.
“When randomly selected day cares introduced a fine to discourage parents from arriving late, parents arrived even later than they did at day cares in the control group.”
From Stories in Action. (2022) · cites this paper as Gneezy & Rustichini, 2000
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“Parents did not feel comfortable taking advantage of teachers’ patience, but once the fine was introduced, they felt more comfortable paying to arrive late (Gneezy & Rustichini, 2000).”
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- Authors
- Gneezy, U., & Rustichini, A.
- Affiliations
- Technion – Israel Institute of Technology (IL)
- ORCID
- Rustichini, Aldo
- Venue
- The Journal of Legal Studies
- Publisher
- University of Chicago Press
- Published
- 2000-01
- Volume
- 29
- Issue
- 1
- Pages
- 1-17
- ISSN
- 0047-2530 (ISSN-L)
- 1537-5366
- OpenAlex
- W2083080613
- Cited by
- 1,816
- References
- 0
- Citations by year
- 2026: 62 · 2025: 71 · 2024: 53 · 2023: 57 · 2022: 69 · 2021: 80 · 2020: 136 · 2019: 145 · 2018: 124 · 2017: 76 · 2016: 104 · 2015: 102 · 2014: 77 · 2013: 100 · 2012: 95
- FWCI
- 60.45
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- The Journal of Legal Studies (publishedVersion)
- Topics
- Social Sciences › Safety Research › Experimental Behavioral Economics Studies
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Law, Economics, and Judicial Systems
- Social Sciences › Decision Sciences › General Decision Sciences › Decision-Making and Behavioral Economics
- Keywords
- deterrence hypothesis, monetary fines, penalties, incomplete contracts, information asymmetry, daycare centers, behavior change
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