Paying for Integers

97 Pages Posted: 4 May 2022

See all articles by Jeffrey Cross

Jeffrey Cross

Hamilton College - Economics Department

Guangli Zhang

Washington University in St. Louis; Saint Louis University - Sinquefield Center for Applied Economic Research

Multiple version iconThere are 3 versions of this paper

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

Suggested Citation

Cross, Jeffrey and Zhang, Guangli, Paying for Integers. Available at SSRN: https://ssrn.com/abstract=4100606 or http://dx.doi.org/10.2139/ssrn.4100606

Jeffrey Cross (Contact Author)

Hamilton College - Economics Department ( email )

198 College Hill Road
Clinton, NY 13323
United States

Guangli Zhang

Washington University in St. Louis ( email )

One Brookings Drive
Campus Box 1208
Saint Louis, MO MO 63130-4899
United States

Saint Louis University - Sinquefield Center for Applied Economic Research ( email )

3700 West Pine Mall Blvd. Fusz Hall, 358
St. Louis, MO 63103
United States

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