The Guilt Factor
The opening chapter of Freakonomics presents a very interesting argument; given the chance parents at a daycare would rather be penalized economically for being late picking up their children than face the social and/or moral of being late to pick-up. This situation arises from many possible factors, but all factors have to do with the power of incentives. The incentives and factors are moral, social, and economic. Though each incentive is in itself different a combination of these things is possible which rouses the effect that is discussed early in Freakonomics.
At the Israeli day care the first incentive to pick up your child is the moral type. Written in the school rules are that all children must be picked up by a certain time. The morality comes from how one feels about disobeying the parameters. Key to judging the effectiveness of a certain incentive one must predict the way each individual or group weighs the tug factor of it. More guilt was applied by the day care through just the moral actions than others, which is why after the ramifications were changed an unfortunate increase in tardy parents occurred.
Judging social changes and effects are harder to calculate because they are how other peoples views change our actions. So not only is ones moral guidance persuading a parent to be timely in the pick-up of their child but also what others might think about the few parent who would make the teachers wait with their children. This factor is important because many people care more about what other people think than what they themselves think. Social incentives also play a role in the easy acceptance of economic penalization because people wont think of you as badly because it is seen as a service by the school is you are paying for it and therefore acceptable.
Economic reasons for the situation at the day care failed miserably for multiple reasons. One, it is a private school so parents were already paying larger amounts of money to keep children in that school. Two, the parents could buy off the social and moral incentives that were erected in the beginning leading to a degrading of the system and a large problem of many late parents.
The problems of the first chapter of Freakonomics come largely for a poorly balanced system of incentives. Moral, social, and economic penalties and rewards were not balanced to their optimal levels because they tried to change the system. The right balance was more moral and social incentives or a much much higher economic stipend because the tardy fee was much to low to be effective; making the buying off of guilt much easier, accessible, and frequent.