Metcalf, Satterthwaite, Dillbary and Stoddard, ‘Is a Fine Still a Price? Replication as Robustness in Empirical Legal Studies’

Can fines lead to more of an undesirable behavior, rather than deterring it? This was the surprising finding in Uri Gneezy and Aldo Rustichini, ‘A Fine is a Price’ published in the Journal of Legal Studies in 2000. In this field experiment at Israeli daycares, the introduction of fines caused an increase in late pick-ups by parents. The study has been frequently cited, especially for its suggestion that a fine can act as a price for non-compliance that ‘crowds-out’ social norms and motivations for individuals.

In this article, we conduct two related studies to explore the robustness of Gneezy and Rustichini’s findings and the relevance of their suggested explanations. We seek to replicate their results using experimental surveys administered on MTurk, an increasingly common methodology in empirical legal studies, psychology and economics. While not an exact replication, it allows us to control aspects of the experimental design that are difficult to replicate in the field. We are also able to directly investigate whether fines persistently change the way respondents perceive the consequences (signaling, completing the contract) or relevant social motivations (crowding-out), as suggested by Gneezy and Rustichini. In the first study we translate the original daycare field setting into a vignette-based experimental survey. Our second study similarly investigates the effect of introducing a fine on income tax reporting compliance – an example suggested in the original study. In both studies, respondents are randomized into experimental conditions exposing them to one of two alternate fines or a social norm-based measure. We solicit multiple compliance measures for respondents along with measures of the importance of the alternate explanations to their decisions …

Metcalf, Cherie and Satterthwaite, Emily and Dillbary, Shahar John and Stoddard, Brock, Is a Fine Still a Price? Replication as Robustness in Empirical Legal Studies (July 23, 2020). 63 International Review of Law and Economics 1 (2020), University of Alabama Legal Studies Research Paper No 3659604.

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