Earlier quoted context omitted.
> The daycare owner didn't want $10, he wanted to go home at 4pm. Then he should have set the late fee to as much as the amount he wanted to go home earlier. Which would still be the same amount for every parent regardless of how much money they had, because which parent is late has nothing to do with how much he values not being able to go home on time.
So you set it to $1000. Now the parents are still late and also argue about the insane fine, so you get no money and end up staying later than you would have anyway arguing with the parents. How about instead of a fine you give the kids to CPS. You go home on time, the late parents never come back, or if they do they're never late again, and you win. I guess the point is that monetary punishments don't seem to work w…
Except that you do ultimately get the $1000, because you have a valid contract specifying that, and the premise is that some people are willing to pay it. Which is great -- you get paid $1000/hour to stay an extra hour. Well worth it. (And if not, specify the amount that makes it worth it.)
> How about instead of a fine you give the kids to CPS. You go home on time, the late parents never come back, or if they do they're never late again, and you win.
At which point you still receive no money but have to spend time arguing with them anyway when they show up at your house with an army of lawyers (or a machete) because you left their kids with CPS. And then you lose all your business because no one will trust their kids to someone who would leave them with CPS.
> I guess the point is that monetary punishments don't seem to work when companies can consider it as 'cost of doing business.' If we start taking away the company's hypothetical metaphorical children when they're late to pick them up then they have a reason to listen.
But we don't need them to listen as long as they're paying. Just take their money. It's worth more than their compliance, by definition, because the amount is explicitly chosen that way.