Paying for Integers

107 Pages Posted: 13 Sep 2022 Last revised: 15 Sep 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

Date Written: July 6, 2022

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. Moreover, we nd this behavioral response to integer suggestion varies by tip menu placement, fare amounts and deviation to social norm tip rate. By combining our empirical results with a behavioral model, we nd that our results are consistent with integers acting as focal points for giving. 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 1.3 million dollars in 2013.

Keywords: Integers; Defaults; Tips; Suggestions; Taxi; Focal Points

JEL Classification: I21, 124

Suggested Citation

Cross, Jeffrey and Zhang, Guangli, Paying for Integers (July 6, 2022). Sinquefield Center for Applied Economic Research Working Paper, Available at SSRN: https://ssrn.com/abstract=4213803 or http://dx.doi.org/10.2139/ssrn.4213803

Jeffrey Cross

Hamilton College - Economics Department ( email )

198 College Hill Road
Clinton, NY 13323
United States

Guangli Zhang (Contact Author)

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 )

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St. Louis, MO 63103
United States

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