Paying for Integers
97 Pages Posted: 4 May 2022
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Paying for Integers
Paying for Integers
Abstract
Leveraging the unique context of New York City taxi rides, we estimate that passengers are 25 to 30 percentage points more likely to tip a suggested amount when presented an integer tip suggestion. By combining our empirical results with a behavioral model, we find that our results are consistent with integers acting as focal points for giving and not menu opt-out costs or left-digit bias in warm-glow. Focusing on a 2012 rate fare change that increased the probability of integer tip suggestions by 700%, our estimates imply a transfer from riders to drivers of 2.9 million dollars in 2013.
Keywords: Integers, Defaults, Tips, Suggestions, Taxi
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