In 1998, Gneezy and Rustichini set out to test a theory of the affect one simple change has on a culture. The culture, 10 day-care centers in the Israeli city of Haifa. The simple change, a late pick up fee.
Before the change, the 10 centers experienced only 7-8 late pick ups in a normal week. After a penalty at 6 of the centers, a fine of approx $3 if more than 10 min late. Immediately, the lateness increased. Increasing to 11 the first week, 14 the next, and 17 after that, topping off at about 20. The pre-fine bargain between parents and teachers was what Gneezy and Rustichini labeled an “incomplete contract.” Once the fine was instituted, the ambiguity collapsed.. Turning the day care from a shared enterprise into a simple fee-for-service transaction, allowing the parents to regard the workers’ time as a commodity. The parents assumed the fine represented the full price of the inconvenience they were causing, and it seemed to remove any fears that they might suffer some unspecified consequence for abusing the workers’ goodwill. Parents saw the day-care workers as - Clay Shirky,whose Cognitive Surplus participants in a market transaction, rather than as people needs had to be respected.
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