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Copyright (c) 2000 The University of Chicago
The Journal of Legal Studies

ARTICLE: A Fine is a Price

January, 2000

29 J. Legal Stud. 1

Author

Uri Gneezy and Aldo Rustichini *

Excerpt

I. INTRODUCTION

SUPPOSE you are the manager of a day-care center for young children. The center is scheduled to operate every day until four in the afternoon, when the parents are supposed to come and collect their children. Quite frequently, however, parents arrive late, and force you to stay after working hours. You have considered a few alternatives in order to reduce the frequency of this behavior. A natural option is to introduce a fine: every time a parent comes late, she will have to pay a fine. Will that reduce the number of parents who come late?

The prediction that it will seems extremely plausible. It is in fact also commonly made in two distinct fields of research: legal and criminal studies, on the one hand, and psychological studies, on the other.

The literature in psychology on this topic is very large, and it is textbook material. 1 After early formulations of the theory, 2 a host of studies followed, but the conclusion is still controversial.

This large body of literature agrees, however, on a few general findings. When negative consequences are imposed on a behavior, they will produce a reduction of that particular response. When those negative consequences are removed, the behavior that has been discontinued will typically tend to reappear. The changes induced by the punishment may or may not be enduring changes, depending on several factors, such as the severity of the punishment or whether it is associated with a stimulus or only with ...
 
 
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