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Essay On Restaurant Tipping

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‘But man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour (..).’ As Adam Smith wrote in chapter 5 of ‘The Wealth of Nations’. Whereas this theory stands to reason at the beginning of many economic theories, specifically that of the rational and self-interested consumer, the act of tipping seems to be part of economic behavior at the opposite direction of Smith’s. Many – unobservable - factors seem to play a role in tipping behavior, leading to imperfect conditions in which consumers choose not to act out of self-interest. What drives a consumer to leave a tip behind? A question researched by many economists, discussed in the following section. In ‘The Norm of Restaurant Tipping’, Conlin, Lynn and O’Donoghue present interesting (psychological) theories explaining tipping behavior of consumers. It turns out that the act of tipping logically would serve as an efficiency enhancing phenomenon, especially in restaurants. Namely, if efficiency is achieved when the waiter maximizes his effort; the waiter is motivated to increase his effort. The framework offered by the writers helps interpreting the results they find concerning the efficiency of tipping behavior, which according …show more content…

Their results highlight the importance of simplifying decision processes and of informing and educating to help consumers in making decisions. Disinterest, the interpretation of defaults as recommendations, as well as too much choice and the complexity of choice problems are according to van Rooij and Teppa factors that clarify why consumers tend to act passively rather than actively in the act of choice

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