Are there incentives other than economic incentives

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Imagine that you are the owner of a day-care center and that parents consistently pick their children up late. Your clearly stated policy is that children are supposed to be picked up by 5:30 pm. This makes pick-up time uncomfortable for all involved. What should you do? A couple of economists who heard of this dilemma suggested a simple solution: fine the tardy parents. They then decided to test this solution in a study of ten day-care centers in Haifa, Israel. For four weeks they tracked the number of late pick-ups and then in the fifth week a $3 fine per child per incident of lateness was enacted. After the fine was enacted, the number of late pickups promptly went up. What is the incentive in this example? Do you think this means that incentives don't matter? Are there incentives other than economic incentives?

Reference no: EM131196624

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