[MaxGabriel]

I imagine that the fine at Andreesen Horowitz isn't so much a financial incentive but instead signaling and shock value that respecting entrepreneurs is important, in the same way that book budgets at startups aren't so much a financial incentive but signaling how the company treats engineers.

There's also the matter of who's imposing the fine. For the day care, imposing a fine negated the social incentive not to be late because the parents saw themselves as adhering to the contract the day-care set up. Conversely, the entrepreneur didn't set up such a 'contract' between him or herself and AH, so there's no understanding that it's ok to be late if you pay the fine.

[codinghorror]

I was late to a VC meeting today. Because I am a dumbass and did not plan my travel well.

Should I, or anyone else, be fined for that?

I apologized when I arrived (and e-mailed as I could beforehand) because it's rude to be late for a meeting with people you are in business with, regardless of whatever monetary incentives someone wants to arbitrarily hang on that.

If you need a fine system to make that work, I'd argue you have deeper problems, problems that money isn't going to do much to solve.

[wtrk]

> Should I, or anyone else, be fined for that?

If you had been made aware, in advance, that there was a fine, then sure, you should be fined for being tardy.

Are you pattern-matching on "VC", "lateness", "fine", and your own negative feelings regarding having been late to a VC meeting?

Your reaction to this story (VC firm trying to show that it values potential investment targets' time) is like someone worrying that, since a pizzeria has a policy of not charging customers for a pizza if it's delivered late, you're going to have to provide the delivery person with a free sandwich if you don't get to the door quickly enough after he rings the bell.

[codinghorror]

The idea that it's all about the monetary penalty to get the "right" behavior is not just the wrong incentive, as the research shows, but also reinforcing negative stereotypes of VCs.

It's a bad idea.

[robrenaud]

I don't think you really understood the research. The research was talking about the difference between social and market norms, not directly about what is the appropriate cost for lateness.

It was social norms that kept the parents picking up the kids on time consistently. Adding a small cost switched the parents from social norms mode to market norms mode. Instead of the parents thinking "oh no, I better hurry now, because it's wrong to be late" as was the case when lateness was free, it became a "is it worth $3 to be 10 minutes late?" calculation.

Replacing social norms with a poorly chosen market rate is dangerous and can potentially backfire. Essentially, there is a discontinuity in people's behavior between a cost of $0, where you benefit from social norms, and a cost of epsilon, where the social norms go out the window. If you actually charge people the cost they are inflicting on you for lateness, then it's again a different story.

[codinghorror]

Correct, so we would be replacing "let's be on time for meetings with our business partners because we respect them" social norms, with "is it worth $50 to be 5 minutes late for this meeting with a company we invested in?" for ... a venture capitalist. People who have, er, lots of money. That's why they're in the room.

I'm not clear what you thought I misunderstood here.

[MaxGabriel]

I don't mean to hold a position that Andreesen Horowitz's fine is effective, so I can't answer that -- I just think that the situation of the daycare and Andreesen Horowitz differs enough that we can't draw conclusions about one by looking at the other.