Do people tip strategically, to improve future service? Theory and evidence
AbstractA central question about tipping is whether people tip strategically, to improve future service, or only because tipping is a social norm. I present a theoretical model that incorporates psychological utility associated with tipping (because it is a social norm) and allows tipping to be motivated also by future service considerations. The model predicts that if future service is a reason for tipping, the sensitivity of tips to service quality should be higher for repeating customers than for non-repeating ones. Surveys of 597 restaurant customers are analysed and suggest that future service is not a reason for tipping.
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Bibliographic InfoArticle provided by Canadian Economics Association in its journal Canadian Journal of Economics.
Volume (Year): 40 (2007)
Issue (Month): 2 (May)
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- Azar, Ofer H., 2006. "Tipping, firm strategy, and industrial organization," MPRA Paper 4485, University Library of Munich, Germany.
- Sari, Nazmi, 2013. "On anti-smoking regulations and tobacco consumption," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 43(C), pages 60-67.
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- D'Agostino, Elena & Lisciandra, Maurizio, 2012. "Enforceable vs. non-enforceable contracts: a theoretical appraisal with fair players," MPRA Paper 41261, University Library of Munich, Germany.
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