Evaluating the 'Crowding Out' Effect of Fines
A well-known field experiment was conducted to see if a monetary fine could reduce the number of parents arriving late to pick up their children from a daycare center. The researchers found that after the fine was introduced, the number of late-arriving parents actually increased. The leading explanation is that the fine replaced a social norm (e.g., guilt, consideration for teachers) with a market transaction (i.e., paying for extra time), a phenomenon sometimes called 'crowding out'.
Critically evaluate this conclusion. Discuss at least one scenario where introducing a similar fine might successfully decrease an undesirable behavior and explain why the outcome would likely be different from the daycare study.
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In a well-known economic field experiment, a fine was introduced at several daycare centers for parents who arrived late to pick up their children. Contrary to the expected outcome, the number of late-arriving parents increased after the fine was implemented. Which of the following statements best analyzes the underlying reason for this change in behavior?
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