Freakonomics
Lately, I have been reading “Freakonomics” by Levitt and Dubner. There was an interesting story about how economists wanted to test how parents respond to a fee when they are late picking their children up from daycare. This study lasted twenty weeks, but the fine was not introduced until the fifth week. During the first five weeks, there was an average of eight late pickups. But after the fifth week, when the fine was announced, the late pickups went up to an average of twenty. You would think that a fine would be an incentive to pick up your child on time. When the economists eliminated the fine on the seventh week, the number of late pickups remained the same. The reason that the economists came up with is that when the parents pay the late fine, they feel no quilt when they don’t pick up their kids on time. This only shows that business and other fields such as psychology are more intertwined than most of us think. In the example that I just discussed, we see evidence of things working against logic. I am sure that most of us would have thought that introducing fines would decrease the late pick-ups instead of the opposite. This could also be incorporated in the management department. For example, in "The Strategy That Wouldn't Travel", the SPITS program worked well in the Wichita plant but back fired at the Lubbock plant. Why didn't work? Perphaps this could be explained in the field of psychology.
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