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Monday, March 13, 2006

Parent-Onomics: The Economics of Dealing With Your Kids

What does Economics tell us about dealing with our children? Apparently, quite a bit. Donald Cox at Econlib relays this incident:
It's go-home time at my daughter's preschool. I see a parent struggling to get snow pants on his toddler in an 80-degree room. I think: "Where's the incentive compatibility in that?" I do it the easy way: I scoop up my daughter in my right arm and her winter clothes in my left and out the door we go. Whereupon, in the 30-degree cold, she dons her winter duds at a speed rivaled only by local firefighters answering a call.

Before you accuse me of being a cold-hearted economist, consider: his daughter was crying, mine was not; he was exasperated and grumpy, I was not. So who's on higher indifference curves?


I think economic principles have a lot to offer parents. Parents hold considerable sway over their kids. Maybe not as much as they like, but nonetheless: what parents do affects their child's incentives. And the main take-home message of economics is that incentives matter.

Read the whole thing here.

Bryan Caplan notes that most of Cox's anecdotes are geared towards young children. He gives an application to teenagers here.

The Unknown Wife and I often find ourselves in these situations. Whenever we want our kids to do something that they don't wnat to (like clean their rooms, or put the dishes away), she tries to convince the kids that our way is wisest and micro-manages (I do this sometimes too). Unfortunately, this makes getting the task done OUR responsibility, and we bear all the costs. So, there's no incentive compatibility there.

In our better moments, we use what an economist would call "noisy ex-post settling up". Here's how it works. Let's assume that we tell our kids to pick up their rooms. Here's the way it plays out:
  • Child #1: I don't want to.
  • Child #2: works for about 2 minutes and then plays his game boy.
  • Us: "Well, that's your choice." Then we leave the room and neither mention it again nor do anything else at that time.
Later on, we pick up their rooms without saying a word or making any show out of it (often, after tehy've gone to school. In a day or two, we might have made plans with the kids to go out for ice cream (important: they must know about the plans and be looking forward to the outing).
Just before we go, we say "Oh, I forgot -- we're not going."

The kids will go ballistic, and ask why. We reply, "When we asked you to pick up your rooms, it was your choice, and you chose not to. Now, whether or not we go for ice cream is OUR choice. And we choose to not go."

This allows us to pick the time and place of the consequence, so that it really smarts. Setting a consequence on the spot means we might not hit the kid's hot button. Doing it after the fact makes it much more likely that we'll get them where it counts.

Before, I used the term "noisy ex-post settling up"". Here's the explanation for the term in non-technical language: "Noisy" means there is some randomness to when and where we give the actual consequence; "ex-post" means "after the fact", and "settling-up" is pretty much self-explanatory.

This is also very similar to the way the real world hands out consequences. If you screw up, you don't know when or where you'll pay for your choices.

It may seem Maciavellian, but it works amazingly well. We can't claim authorship of this approach - we got it from the books written by John Rosemond, who is probably the best child-rearing maven around (and funny, too).

Any thoughts?

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