A Fine is a Price
Psych 🧠 - 472/500
Hey reader 👋
We often assume that adding rules, fines, or penalties automatically makes people behave better.
But what if punishment changes the meaning of the situation instead of correcting it?
What is it?
This landmark research paper, “A Fine Is a Price” by Uri Gneezy and Aldo Rustichini (2000), demonstrates a counterintuitive psychological and economic insight: introducing a small fine can increase bad behavior instead of reducing it
The authors conducted a real-world field experiment in 10 day-care centers in Israel. Parents frequently arrived late to pick up their children, forcing teachers to stay beyond working hours.
To reduce lateness, six centers introduced a small monetary fine for parents who arrived more than 10 minutes late, while four centers served as controls.
Contrary to standard deterrence theory, late pickups increased significantly after the fine was introduced and stayed high even after the fine was removed.
Key Findings:
Introducing a fine increased late arrivals, rather than reducing them.
Late arrivals nearly doubled after a short adjustment period.
Removing the fine did not restore earlier, better behavior.
No similar increase occurred in the control group.
Parents treated the fine as a price, not a punishment.
The fine changed how parents interpreted the social contract.
You NEED to check out this psychology handbook!👇
This Handbook explains 150+ biases & fallacies in simple language with emojis.
Or the Amazon Kindle copy from here.
What do I need to know:
Punishment can backfire if it reframes moral behavior as a paid service.
Social norms and market norms are different and mixing them is risky.
Small fines can legitimize bad behavior instead of deterring it.
Once behavior is “priced,” it’s hard to return to moral restraint (“once a commodity, always a commodity”).
Incentives don’t operate in a vacuum they change how people perceive the entire situation.
This insight applies far beyond daycare: parenting, workplaces, policy, climate fines, and even relationships.
Source:
https://www.jstor.org/stable/10.1086/468061?seq=1