--- Jordan Hayes <jmhayes at j-o-r-d-a-n.com> wrote:
>>
> I know: you and Doug think you should price people
> out of their "bad
> habits" ... but I prefer to believe that the best
> way to get people to
> not do something that they don't have much control
> over in the first
> place is to give them a better alternative.
>
[WS:] Do you reject the idea that prices influence human behavior, or do you accept that they do but reject that on moral grounds?
If the former, the consequence is a behavioral model in which there should be only carrots and no sticks. By thak logic, would you also advocate dropping fines for traffic offences (they are regressive) and perhaps replacing them with commercials that obeying the law saves gas and lives? Or moving further and abolishing the awful cost of borrowing money (also regressive) and offering interest free loans accompanied by an educational leaflet instructing the borrower how to use that money wisely? But why stopping at that - how about free goodies to everyone, after all paying for them is regressive.
Imposing fees to discourage behavior that leads to the tragedy of the commons benefits not some abstract social principle, but the interests of the very users of that service. When I want to get really fast from pint A to point B, I would like to be able to so that instead sitting in traffic jams - and I am prepared to pay extra for that.
Such traffic jams are caused by that fact that the marginal cost of driving (basically the cost of gas) is much lower than the marginal cost of transit (fare.) It is, therefore, rational for people to drive instead of using transit, even where transit is available. For example, transit pass for a Baltimore - DC commute costs $255, the marginal cost of that commute by car (gas) is about $160 per month. Therefore, I drive and so do many other people. But I bet you that when prices of gas exceed $4/gallon in this summer - as many analysts predict - that $255 a month would be a cost saver and many people, including myself will switch.
And if that is not enough, there is also the endowment effect http://en.wikipedia.org/wiki/Endowment_effect which results in human unwillingness to part with what they alreay have or are used to. So, even if rational alternatives do exist, the endowment effect discourages people from using them and instead prompts them to rely on the old and familiar ways.
So unless you prove to the contrary, it seems obvious to me that cost does influence human behavior, even if alternatives are available. It does so by providing rational disincentives and by overcoming endowment effect that is an obstacle to rational behavior (i.e. choisng a better priced alternative).
You may, of course, oppose using that mechanism on moral grounds, e.g. because it inconveniences you or someone you know - but that is an awfully weak argument against it.
Wojtek
____________________________________________________________________________________ You rock. That's why Blockbuster's offering you one month of Blockbuster Total Access, No Cost. http://tc.deals.yahoo.com/tc/blockbuster/text5.com