social norms vs market norms

Last week on NPR I enjoyed this interview with Dan Ariely [link to the audio at the top of the page] about his new book, Predictably Irrational.  At the NPR link above, there is an excerpt about social norms vs market norms: Ariely tells the story of an Israeli daycare center which struggled with people picking kids up late.  The center introduced a fine for lateness and found that tardiness actually increased, with the story being that people stopped feeling guilty about being late since they were paying for it.  Then, when the fine was removed, lateness did not fall to its earlier levels, suggesting that once you move from a social norm to a market norm, it’s very difficult to move back.  (Arieli gives other examples of this one-way street in an excerpt from his book.)

This reminds me of the debate in education on intrinsic (I teach because I care!) vs extrinsic (I teach because you pay me!) motivation.  Duflo, Hanna, and Ryan did a project paying teachers to show up to school in India (where teacher absenteeism is a major problem): they found that despite the introduction of extrinsic motivation (which substantially boosted teacher attendance), teachers worked about equally hard at school, suggesting that they didn’t lose their intrinsic motivation.  Unfortunately, this seems to be because the teachers in this sample spent very little time preparing for school, so perhaps they didn’t have much intrinsic motivation to lose.

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