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What I am Studying and Why

Let's take a shot at a simple puzzle.
You are the manager of a Day Care Centre. You notice that every week, around 6-7 parents arrive late to pick up their kids. Which means, you have to stay extra and look after them. You have to do something to change this habit.
So, what do you do?
An obvious answer is to introduce a Fine for late comers.
A couple of researchers (Gneezy and Rustichini) did this in Israel to see if the introduction of a fine reduces the number of people coming late for pick-ups.
And guess what they observed:

In short, the number of people who were coming late increased. And worse, even when the removed the fine in Week 17, the number of parents coming late never came down to the original level without fines.
Quite a bazinga, isn't it?
I mean, when you introduce a fine, you assume people are going to behave rationally and think, oh this is unwanted behaviour, so we should not be doing this.
But what really happened is - human beings are not rational. The introduction …

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