Sunday, 14 June 2009

Parents pay their money and take their choice....

The tug-of-war between the left (logical) and right (intuitive) sides of the brain is played out in all kinds of financial scenarios.
Take the case of the Israeli child-care centre that decided to fine parents who turned up late to collect their kids*. Before parents who were late picking up felt guilty, having inconvenienced the teachers. After the fine was introduced late pick-ups actually increased. Parents saw it as a service for which they were willing to pay.  The fine was intended as an emotional move to punish parents for lateness, it was interpreted more logically, as a means of exchange.
Clearly a larger fine was needed. That way the pain felt by the right brain would have ruled out such a logical but unintended outcome.
*Mentioned this week in Michael Sandels' first Reith lecture

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