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Comment by m12k | Hacker News Reader

The book Predictably Irrational has a great section about this. Basically we have a "market" way of thinking and a "social/gift" way of thinking about goods. When something is free we think of it in the latter way, when it's not, we use the market mindset. And the transition can be jarring - say you're selling cookies. If you lower the price, people buy more cookies. Lower it a lot to, say $.01 per cookie and people will buy all of them. Then lower it all the way to free and people will suddenly take fewer again. Why? Because when you buy all the cookies at $.01 you're a shrewd merchant, but when you take all the free cookies, you're the asshole who took all the free cookies, so there's none left for everyone else. It's two different mindsets, leading to a discontinuity in the supply and demand graph.

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Yes, there are also related examples of this in some of Ariely's books. If you introduce a fine for showing up late at daycare the number of late people and the average lateness goes up, not down, because then people are "buying" the right to be late for example.

Or maybe if you do not have a specified fine, then in the heads of people there is still a “virtual fine” associated with being late, but it is not an exact number, but a wide range, and people tend to predict all kinds of bad things that would happen (but 99% of times it wont happen), so the fear of an unknown punishment is higher than a known one.

Intuitively the present value of punishment is amount of punishment x probability of getting it, and if the second term is nil then so is the punishment; but according to many studies I believe the amount of punishment is much less important and being caught is what matters.

There were some issues with the paper you're citing ("A fine is a price"). I believe a grad student wanted to replicate their analyses and they told him the data had been lost, which is pretty weird. I wonder if anyone has replicated the experiment.

> they told him the data had been lost, which is pretty weird

I don't think that is weird at all. After the lead student on a project leaves, the faculty, especially non-technical or not so organized ones, may not even know how to access the data anymore. Who knows what arcane scripts or processes are needed to get it in a shareable form.

There can also be hoops with the IRB to jump through and a lot of effort in general to give someone access to data. I had an IRB insist that all raw data be deleted after 2 years of collection anyway, so by the time the paper got published the raw data had to be deleted forever.

I wish it were easier to release data and replication kits, but sadly the incentives aren't there.

For big names in a field not to know to keep their data - certainly today, that would be shocking. I think it was quite shocking even back then. I still have my data for my work from my PhD in the 2000s. It isn't a job you'd leave to a student. IRB hoops are a different matter - but this wasn't that, as I recall.

Interesting because if the supermarket/grocery store has a 0.01 steaks and someone placed the whole lot in their trolley I am very sure people will posting about the asshole on social media

Is the book worth reading?

I'd say so - it's a very accessible introduction to behavioral economics. Similarly, "Stumbling on Happiness" is an easy introduction to the psychology of happiness, but also tells you a lot about perception, memory and decision-making, and the illusions and biases we have. And finally "Thinking, Fast and Slow" is a slightly deeper and longer but still accessible book that digs into the details about how many of the biases we have (that the other books talk about) arise due to the interplay between the conscious and unconscious parts of our brains - it felt like a deeper explanation, but I'm glad I read after reading about most of the biases before in the "lighter" books.

Thank you so much for the reply. I'm gonna check all these out but I'll start with Predictably Irrational. Have a good one!

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