Tipping in Restaurants and Around the Globe: An Interdisciplinary Review

HANDBOOK OF CONTEMPORARY BEHAVIORAL ECONOMICS: FOUNDATIONS AND DEVELOPMENTS, Morris Altman, ed., M.E. Sharpe Publishers, 2006

35 Pages Posted: 9 Jan 2004

See all articles by William Michael Lynn

William Michael Lynn

Cornell University - School of Hotel Administration

Abstract

Tipping is an interesting economic behavior because it is an expense that consumers are free to avoid. Although called for by social norms, tips are not legally required. Furthermore, since tips are not given until after services have been rendered, they are not necessary to get good service in establishments that are infrequently patronized. For this reason, many economists regard tipping as mysterious or seemingly irrational behavior. The present chapter explores this behavior and its implications for economic theory and public policy. The chapter is divided into four sections. The first two sections provide more detail about the phenomenon of tipping by summarizing and discussing the results of empirical research on the determinants and predictors of restaurant tipping and of national differences in tipping customs respectively. Then, economic theories about tipping are reviewed in light of the previously summarized empirical literature. Finally, the public welfare and policy issues raised by tipping are discussed.

Keywords: Tipping, restaurants, social norms, consumer behavior, national differences

JEL Classification: H26, J30, L84, M12, N30, O57, Z13

Suggested Citation

Lynn, William Michael, Tipping in Restaurants and Around the Globe: An Interdisciplinary Review. HANDBOOK OF CONTEMPORARY BEHAVIORAL ECONOMICS: FOUNDATIONS AND DEVELOPMENTS, Morris Altman, ed., M.E. Sharpe Publishers, 2006. Available at SSRN: https://ssrn.com/abstract=465942

William Michael Lynn (Contact Author)

Cornell University - School of Hotel Administration ( email )

435B Statler Hall
Ithaca, NY 14853-6902
United States
607-255-8271 (Phone)

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