Lessons from behavioral economics

In an oft-cited study in behavioral economics, researchers Ury Gneezy and Aldo Rustichini collaborated with a daycare center where parents had the annoying habit of arriving late to pick up their children.

In order to address this punctuality problem, the researchers decided to impose a fine on late parents, with the hypothesis that the introduction of late fees, all other things being equal, would decrease the frequency of lateness. However, following the introduction of the financial penalty, instead of decreasing, the number of late parents increased significantly. A surprising change in behavior.

The explanation for this unexpected behavior given by the researchers is that by introducing a price into the decision to pick up one’s children on time or not, market logic came to replace existing social norms. Previously, the only penalty late parents faced was guilt for not meeting the social norm of showing up on time and for abusing the goodwill of daycare staff.

However, by introducing a financial penalty, arriving late then becomes a market decision, to be assessed against the costs/benefits of arriving late and paying the penalty. Several parents then decided that it was economically advantageous to pay the penalty, removing from their thinking the impact of this decision on the childcare staff.

Even more surprisingly, when the daycare decided to return to the initial situation and withdraw the financial penalty, the situation did not return to normal. On the contrary, an even greater number of parents began to arrive late for daycare. Market norms had replaced the social norms previously in place and it was impossible to return to the initial situation.

Now, it is obvious that if the daycare had decided to impose a more restrictive penalty, it would have succeeded in reducing the delays of parents. However, introducing a price into the equation changes how individuals perceive the choice they face and the standards they use to make a decision. Thus the implementation of a tariff in order to dictate actions generally framed by social standards can have sometimes unexpected consequences and contrary to expectations.

In the application, there are few differences between a vaccination obligation and the imposition of a health contribution. In the first case, offenders would probably have to pay a hefty fine in the event of non-compliance with the obligation and in the second, only the wealthiest will be able to afford to pay the contribution without changing their behavior.

However, by encouraging the vaccination of the most recalcitrant by imposing a health contribution instead of a vaccination obligation, the government is changing the terrain on which adherence to the vaccination strategy is played out. From a moral and civic obligation, vaccination becomes a simple means of avoiding a tax, a market transaction.

And as behavioral economics teaches us, this change in terrain from the social norm to the market norm could have undesirable effects on the behavior of individuals. The health contribution could be effective for those who did not receive a first dose and who will face a significant penalty. However, it could have unintended consequences for those who are now being asked to take a third dose. Unaffected by the health contribution, they could now be inclined to analyze the decision to be vaccinated from the point of view of costs/benefits instead of civic duty, and to consider that this additional vaccination does not bring them enough of profits.

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