The Operations manager proposed getting soda in the right mixes from Costco, putting it in a refrigerator and putting a covered can for payment with forty cents the proposed payment. The goal was that the venture broke even — the time to purchase and place the soda in the work rooms was donated. If two months went by when receipts did not cover the costs, the practice would be discontinued.

The fund was routinely “over” as people often put in a bit extra to cover for someone who might not have paid their fair share that month.

If you know there is “transaction cost” in addition to “access cost”, your trusting environment question is easy to answer.

Also, there is “interval” of the “honesty” that Professor Ariely did NOT count in his MIT Dorm experiment, where he placed 6 coke in the refrig and gone within 72 hours. Why this experiment is not perfect on honesty test?

Because there is “interval”. e.g. Since the “transaction cost” to get a coke at midnight would be much higher than at weekend when student going to supermarket to get coke. So, 72 hours is NOT long enough because many students, sharing the dorm with interval of “one semester”, so “borrow” a coke in refrig, and buy one to return later is an economic way to save the “transaction cost”.

In other words, Professor Airely, “mis sample” the result. I am sure if he went back to check after the weekend, his 6 coke would be back when student who “borrowed” the coke went to supermarket and buy back and return.

So, when you refer to “steal”, you often mean the “access cost” of the item, but smart students like MIT would “borrow” to save “transaction cost”, that’s why they are smart. So, if the interval is “one week”, then Professor Ariely may find his 6 cokes, although NOT the original ones, will still be there.

That’s why if you stay at Hyatt Regency, they charge you $7 for a bottle water, and that $7 is the “access cost” PLUS “the maximum of the transaction cost during your stay”. In other words, sometime at midnight you may drink it.

Now, smart customers may drink it at that “maximum transaction cost moment”, and buy back and return later, say, in day time, when they can grab one much cheaper. That’s MIT student’s practice.

So, later Hyatt place a sensor, as soon as you “touch” the items or water, they will make you pay, regardless if you bought one and place back. That’s Professor Airely’s “honest” standard and the “interval” is “second”, whereas it is NOT college student’s interval.

So, you can see the “interval length” also related to “Social Norm” and “Market Norm” Professor Airely mention in his wonderful book. For “close to 0 time interval” is “market norm”, whereas for “longer time interval” is “social norm”.

So, when you talk about “honesty” you really should make it clear. Are you talking about “Social Norm honest” or “Market Norm Honest”.

So, a more trusting environment would be “longer the interval” or “Social Norm honest system”, whereas “market norm honest” is often hard to exist just like Digital Signal System, when your “sampling frequency” is too short, you catch all the noise, i.e. you think people dishonest, whereas, most people they are not sampling in “real time”.

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1) do we have a sufficeintly trusting environment to justify using the honor system (as measured by the probability of each of the three category times the contribution by each category)? and

2) how do I build a more trusting environment (which would increase the probable outcome in $ and justify the pricess)?

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Wayne

People steal and are dishonest when they think they will get away with it.
They have forgotten or are not aware that “God” sees all. He will balance the till one way or the other.
Once upon a time i would of had a free coffee these days I know better and would pay. Like me some are slower to learn lifes learns lifes lesson.

For example, the Turkey Hill stand just have all sorts of their brand drinks dispensers and cups. Hey! help your self like a graduation party at your friends home.

So, the best policy to do is for each citizen to pay $25 and have all you can enjoy coffee …

Pay once and enjoy as you wish is the future. Pay per use incur too much overhead. That’s why people enjoy going to party, but not going to cafeteria.