Honesty in a box

(featured image credit Tim Green)

Acting dishonestly often pays. So does acting honestly go against our own self-interest?

Travelling along Britain’s rural roads one doesn’t just encounter octagonal former toll houses (and real tolls). Something else that was unfamiliar to me (having grown up in a different country) is the honesty box. On the roadside you see improvised racks with boxes of eggs, fresh produce, pieces of cake, jars of chutney and such like. A piece of cardboard announces the prices, and passers-by are expected to leave the exact money in box provided for that purpose when they take one of the items on offer.

Seen through an economist’s eye, the fact that this practice is as widespread as ever suggests that there is both a steady demand and a persistent supply in this peculiar market. If the goods on offer did not appeal to the customers, the tradition would wither. But as personal experience confirms, the eggs are generally super fresh, and the cakes can be to die for. Similarly, if the trust of the providers of the stuff was misplaced and they didn’t get a decent return, they’d have long given up on the idea.

Give a little, take a little

And yet… There are no official statistics about the size of the honesty market, but a couple of recent anecdotes indicate that all is not well in honesty box land. Earlier this year, a couple was caught on CCTV camera, stealing £40 from an unattended farm shop’s honesty box and a sack of potatoes. A few months later a woman was seen taking the contents of a box to collect charity donations in return for a bag of duck food.

So it is perhaps not unsurprising that a Scottish farmer decided to replace honesty boxes with solid vending machines. A few years ago, newsagents’ chain WH Smith also got second thoughts about its own version of honesty box based newspaper vending after finding customer integrity was not quite as expected. And councils in rural areas are now also replacing age-old honesty boxes in car parks with conventional ticket machines. In the BBC radio consumer programme, You and Yours, the head of Recreation and Access at one of the UK’s largest national parks stated last week that the average amount paid per car is just 15p. The facts speak for themselves: on one location, the annual takings with an honesty box were £5,000. Since installing a ticket machine, they are £23,000.

honestybox2

Free parking? (image: Peer Lawther CC0)

Maybe the mystery is not why some people are so dishonest as to steal money and potatoes, or who cannot even muster the £1 it costs for 3 hours’ worth of parking. How come so many of us actually are honest – even if it costs us money?

This question is related to other situations where we give money when there is no obligation or enforcement, like Pay what you want (PWYW). This pricing strategy has been tried many times, notably by restaurants, but it has rarely been a runaway commercial success. One notable exception, it seems, is Radiohead’s In Rainbows album, which ‘sold’ 1.2 million copies in this way in 2007. But even in this case widely divergent claims are made about how much the typical downloader offered (I paid £7 at the time).

Honesty on the balance

Why didn’t everyone simply download the album for free? Even though too many people pay too little in PWYW restaurants, how come not everyone simply eats for free? One explanation comes from Philip Graves, the author of Consumer.ology, a book on consumer behaviour. In the same BBC radio show he points out that we are not unconditionally honest. Honesty does not confer an evolutionary advantage if it means we are sacrificing resources that could be beneficial for ourselves. But as we evolved into social beings, unmitigated selfishness had to compete with our desire to remain a member of the community. Cheating our fellow members could lead to being ostracized, so we learned to balance these two conflicting forces.

Fear of ostracism is perhaps less of an issue these days. But we do experience a similar tension between doing what is beneficial for us, and what is ‘right’. Charitable donations are an intriguing example: there is no obligation to pay, and we obviously get nothing material in return.

This is supported by an interesting experiment conducted by Ayelet Gneezy, a behavioural scientist at the University of San Diego, and her colleagues. The riders of a rollercoaster in a theme park were, as is often the case, photographed in full swing, and they were offered the chance to purchase a print. In one condition, a simple PWYW arrangement, 8.39% of the riders purchased the photo at an average price of 92 cents. The second condition was similar, but with the added message that half of their voluntary payment would go to a nationally recognized patient-support foundation. Only 4.49% of riders bought the photo, but at an average price of no less than $5.33.

rollercoaster

The price also goes up and down (image: curious fish CC0)

Morality and self-interest

The feeling (or the knowledge) that one is doing the right thing seems to be quite powerful in counterbalancing the economic loss of making a payment. But how come there is still so much variation in how honestly different people behave, or even how the same people act in different circumstances?

Maybe the answer lies in a recent post by philosopher Filip Spagnoli. In There is no morality, and that is a good thing, he observes that despite more than 2000 years of trying, moral philosophers have utterly failed to come up with a convincing objective moral framework. He speculates that their failure stems from the fact that they have been seeking to explain something that simply doesn’t exist.

That doesn’t mean we don’t have a sense of right and wrong. These intuitions may not proof of an external morality, but they still give us guidance of what is in our self-interest. This is the ‘warm glow’ that represents the utility we get from making ‘altruistic’ sacrifices without getting a material benefit. Simply: doing what is right benefits us.

Where does our moral sense come from? There is no clear answer to this. It is very hard to separate nurture from nature, even though education and social norms do seem to play an important role in its development. Easier to answer, however, is the question, does the warm glow of behaving honestly outweigh the economic benefit of £40 and a sack of potatoes?

That, like so many other choices, is a trade-off which is matter of personal preference*. We all have our own, unique box containing our honesty.

 

*: and of course of the context

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About koenfucius

Wisdom or koenfusion? Maybe the difference is not that big.
This entry was posted in Behavioural economics, Economics, Ethics and tagged . Bookmark the permalink.

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