Today was the last day of school here in Finland. Again thousands of young people graduated from their schools. Most notable of these graduations is the high school (lukio) graduation.
Graduating high school means a big party.
I was invited to one of these parties held by my wife’s relative. More interesting than the party itself was the atmosphere of success. The 19-year old girl who graduated was a straight-A student. She was obviously up for a scholarship for her success. Here’s basically what happened:
- She worked her ass off for 13 years in school to get to this point.
- She still doesn’t know why she’s doing it.
- But luckily the school does, they awarded her with a scholarship worth 85 € for a job well done.
Apart from Harry Potter, who has ever been sorry that the school term ends?
In Finland we have the compulsory education (oppivelvollisuus) sometimes called “koulupakko” as in “forced school”. Learning new things, basically the most fascinating thing out there, is turned it to a compulsory duty.
On top of that the school system has crappy incentives. It’s not like 85 € was in any balance with the amount of work and dedication a person puts into their studying in order to get there. The only real incentive for doing well in school is that you on average get a better job.
I will argue that such a distant incentive is not motivating for almost anyone. In order for people to do well in school they must adopt a personal incentive on the meta-level. You have to learn to like what you’ve been told – not to learn more about whatever you like.
The world is run by incentives. If you want to understand the behavior of an individual or an organization you should look at their incentives.
Let’s look at the incentives of lost property offices in Finland
- If a person loses an item and somehow finds out the office where the object was taken, they are first charged 1,70 €/minute to call to confirm the object is there. If the item is found, you will pay the finder’s fee (10 % of the item’s value, up to 20 €). Other fees like storage fees may still apply (up to another 10 % of the item’s value). It is in the interest of the person to pay these fees probably up to about 75 % of the item’s current value if the other alternative is to buy a new item altogether. So they’re happy to pay. But the office only takes up to 20 % of the items value, so it’s a real bargain.
- If no one comes to collect an item that was delivered to the lost property office, they will auction it off. At the auction the office will get 100 % of the item’s current resale value.
What would you do?
Lets assume you are running a business where you have a fivefold incentive in not finding the owner of an item you have in storage. Would you try to find the owner knowing that even if you find him/her, you only lose money.
Can the incentives be changed?
Most people agree that it would be nice if you could get your stuff back without having to pay anything. The problem is that losing something happens so seldom that no one really has any incentive to do anything about it.
The incentives change automatically after enough people can agree that they are wrong. In our case that equals to the number of people who like FinderBase better.