Comment by AnthonyMouse | Hacker News Reader

Comment by AnthonyMouse | Hacker News Reader

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> This is not true if you see $50 and $150 dollars as basically the same amount when compared to your overall wealth. Would you care about a 2 cent fine for overrunning you time on a 1 cent parking space?

At which point you can be happy that the rich person is voluntarily paying the 3 cent fine instead of the 1 cent parking fee.

If you made it a $1000 fine vs. a 1 cent parking fee then they would pay the parking fee, but how is that actually better? You convinced them to spend more of their time keeping track of how long they had before having to put money in the meter and as a result you ended up with less money. Net loss to everyone.

Meanwhile now you're creating a bunch of perverse incentives for rich people to register their cars in someone else's name or waste thousands of man hours on both sides to contest an ordinary parking fine, and creating a bunch of perverse incentives for governments to pass vague, misleading, counterintuitive or impossible to comply with laws so they can jump out of the bushes and impose massive fines on anyone who walks by with money in their pocket.

A normal fine simply becomes "the cost of doing business". The point is to deter Google, not to simply add a cost to its activities.

Related links:

https://rady.ucsd.edu/faculty/directory/gneezy/pub/docs/fine...

NYT: https://www.nytimes.com/2005/05/15/books/chapters/freakonomi...

NPR: https://www.npr.org/2008/03/31/89233955/dan-ariely-takes-on-...

A fine is a price -- exactly. So why are you trying to deter them from doing something which they're willing to pay you more to let them do than it costs you to let them do it?

Or if the fine would be lower for some other company with less money, then why are you willing to let that other company pay less to do it than it costs you to let them do it?

Fine is not supposed to be a price, taxes serve that purpose.

A fine is supposed to be a price. If the only purpose was deterrence then why isn't every offense a capital one and every fine in the amount of "everything you've got"?

Taxes are something else entirely. Income taxes aren't intended to put a price on working so that people won't do it unless it's worth the cost, they're intended to raise government revenue.

A fine is supposed to be a deterrent so it needs to be high enough to deter.

It's supposed to be a price.

Suppose there are fines for both texting while driving and blocking traffic. Now someone is driving in a place where they can't stop without blocking traffic, when they think of a piece of information that they need someone else to know as an urgent matter of life and death.

If they don't send the information right away their kid is going to die. No fine is going to deter them from that. To account for the probability of getting caught, the deterrence-level penalty would have to be something like death for you and your whole family.

I assume nobody is going suggest that the penalty for blocking traffic should be that the government will snuff out your bloodline. Because that's disproportionate, because the fine is supposed to be a price -- and in that case it's one worth paying, because the alternative is worse, so that's what we should want to happen. It's not a problem that we failed to deter someone from blocking traffic for a minute in order to save their child. "Fixing" things so that we actually deter them from that (and then their child dies) is not an improvement.

And the same is true for less drastic events that are still worth more than the cost of blocking traffic for a minute. Which is why a fine is a price, proportional to the harm.

The daycare owner didn't want $10, he wanted to go home at 4pm.

You're missing the forest for the trees.

> The daycare owner didn't want $10, he wanted to go home at 4pm.

Then he should have set the late fee to as much as the amount he wanted to go home earlier. Which would still be the same amount for every parent regardless of how much money they had, because which parent is late has nothing to do with how much he values not being able to go home on time.

So you set it to $1000. Now the parents are still late and also argue about the insane fine, so you get no money and end up staying later than you would have anyway arguing with the parents.

How about instead of a fine you give the kids to CPS. You go home on time, the late parents never come back, or if they do they're never late again, and you win.

I guess the point is that monetary punishments don't seem to work when companies can consider it as 'cost of doing business.' If we start taking away the company's hypothetical metaphorical children when they're late to pick them up then they have a reason to listen.

> So you set it to $1000. Now the parents are still late and also argue about the insane fine, so you get no money and end up staying later than you would have anyway arguing with the parents.

Except that you do ultimately get the $1000, because you have a valid contract specifying that, and the premise is that some people are willing to pay it. Which is great -- you get paid $1000/hour to stay an extra hour. Well worth it. (And if not, specify the amount that makes it worth it.)

> How about instead of a fine you give the kids to CPS. You go home on time, the late parents never come back, or if they do they're never late again, and you win.

At which point you still receive no money but have to spend time arguing with them anyway when they show up at your house with an army of lawyers (or a machete) because you left their kids with CPS. And then you lose all your business because no one will trust their kids to someone who would leave them with CPS.

> I guess the point is that monetary punishments don't seem to work when companies can consider it as 'cost of doing business.' If we start taking away the company's hypothetical metaphorical children when they're late to pick them up then they have a reason to listen.

But we don't need them to listen as long as they're paying. Just take their money. It's worth more than their compliance, by definition, because the amount is explicitly chosen that way.

>At which point you can be happy that the rich person is voluntarily paying the 3 cent fine instead of the 1 cent parking fee.

No, because the issue here is not like a fee, it's about breaking the law and how you should be punished for it in order for it to deter you. A more apt comparison would be "you can be happy that the a rich person is voluntarily paying 500$ to park on top of a crosswalk. In this case you want to deter the person from doing something that harms others, not just to make them pay for it, which in this case means either a fine indexed to income or jail time, so it hurts you even if you are a billionaire.

Nope, deterrence is still only required proportionally. If someone parks on a crosswalk and the cost of that to society is $200 and the fine is $500 then the fact that they're paying $500 means you're still coming out ahead. And if the cost to society is more than $500 then you've set the fine wrong regardless of who is paying it.

Nope, deterrence is still only required proportionally

Cite?

But the point isn't to turn something bad into a valid transaction that is simply unfavourable. The point is to deter the behaviour in the first place, regardless of how much you're willing to pay to do it.

But why would you want to do that? Why would you prefer no-transaction over one that generates a $300 profit?

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