Thursday, June 14, 2012

Why do we get parking tickets?

Have you ever parked illegally? Have you ever caught yourself worrying about getting a parking ticket because you did not park in an approved parking space 200 meters away? Why do we park illegally when there is a danger of getting a parking ticket?

Just like with every other decision people weigh the costs and benefits before taking action. Parking in an approved space is worry free, but it may be far from the destination point. Parking illegally is convenient. Weighing costs and benefits can sometimes determine our preferences. I say sometimes because we may be indifferent between two or more alternatives. Having clear preferences brings up the notion of opportunity cost.

Opportunity cost is the next best alternative that we forgo when we take a decision. In the decision of whether to park legally or illegally we consider the costs and benefits of each choice. If the probability of getting caught and cost of the ticket outweigh the utility derived from saving time and effort from parking illegally near our destination then we decide to park legally. If on the other hand we value our effort and time more than the fore mentioned cost then we will break the law. In fact this theory explains the reasons why criminals engage in robberies, murders and other illegal activities. But more on that in another entry.

How far from your destination would you park?

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