Right, but I might make the determination that I'm willing to pay that extra on a given day. If that's the market price for it, then I get to say if I'm willing to pay that price. And now my kids' teacher has to stay an hour later.

But if it was just a social contract keeping me from picking my kids up late, I'd feel guilty about it and make sure that it didn't happen again. And the teacher might only have to stay a few minutes later.

In my case, I know that my kids' daycare will charge me if I pick them up late. But I don't know what the fee is, and I don't know if they've ever told me. I don't care... I'm not going to pick them up late (I've been close), because I know their teachers have other things to do, and I consider it rude. If I knew it was $50/hour or $100/hour, if I was working hard on somethings, I, on occasion, may have chosen to be late.

Social contracts are tougher to break than market based contracts.

Exactly. I think it's interesting how high the cost had to get to roughly equal the cost of breaking the "social contract". As in, to end up with roughly the same number of occurrences of late pick ups.

Kicking your kids out of that day care if you're too late too frequently is a perfectly valid market contract that'd probably have the same effect.

Not all market contracts are necessarily stated in terms of dollar value.

However, one could argue that such an agreement would only represent a codified social contract. Ie it's still "You aren't holding up your end of the bargain" rather than "the contract is for 2 hours/day with an optional extension of $100/hour each day."

Parking an old, windowless, van just off the day care property may reinforce the need to increase the priority of picking up your offspring.

It may also incentivize customers to change day care.

You may not know - but there's a massive shortage of day care and lots of government regulation.