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In the Past, Jan's Dance Studio Charged a $5 Late

question 107

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In the past, Jan's Dance Studio charged a $5 late fee if monthly tuition payments were received after the due date. A behavioral economist suggested raising monthly tuition by $5 and giving a $5 discount for on-time payments. To the owner's great surprise, the number of late payments decreased dramatically after she followed this advice. What psychological factor might explain this phenomenon?


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A division of a society based on social and economic status, influencing access to resources and opportunities.

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