12 August 2007


I've just read Freakonomics (which is awesome, by the way) and it has left me thinking about incentives in every day lives. Steve Levitt (the economist half of the authorship duo) likes thinking about social incentives in addition to the traditional concept of money. I saw an example today of how a monetary disincentive counteracted a social incentive.

In most coffeeshops in the UK you are charged an extra 20 or 30 pence to "eat in" as opposed to "take away".  Presumably this is to pay for occupying the space and for somebody to clear your dishes when you're done. In the US, on the other hand, you pay the same price to get your Starbuck's in a paper cup and leave the store as you do to get it in a mug and sit down to enjoy it. In the latter circumstance I usually bring my dirty dishes to the counter or the bin, whereas in the former I (in a sense, deliberately) leave my dishes at the table. There's obviously a social incentive to clean up after yourself in public, but it's completely abrogated by the fact that I've now paid somebody else to do it.

So who cares? Well probably nobody: the coffeeshop makes more than enough in "eat in" surcharges to pay for somebody to bus the tables, and the customers feel that they're paying for a reasonable service.

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