Strategic Behavior and Social Norms in Tipped Service Industries

Ofer Azar

The B.E. Journal of Economic Analysis & Policy, 2008, vol. 8, issue 1, 1-18

Abstract: Tipping is a multi-billion-dollar phenomenon that traditional economic theory finds hard to explain. Why do people leave money as tips when service has already been provided? Two main potential reasons are that tipping is a social norm, and a strategic behavior aimed to assure good future service. A game-theoretical model is developed which allows the analysis of how tipping behavior should depend on patronage frequency if strategic motivations affect tipping. Thus, the model provides predictions that can be combined with empirical data on tipping behavior to answer the fundamental question, why do people tip?

Date: 2008
References: View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
https://doi.org/10.2202/1935-1682.1778 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:bejeap:v:8:y:2008:i:1:n:7

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/bejeap/html

DOI: 10.2202/1935-1682.1778

Access Statistics for this article

The B.E. Journal of Economic Analysis & Policy is currently edited by Hendrik Jürges and Sandra Ludwig

More articles in The B.E. Journal of Economic Analysis & Policy from De Gruyter
Bibliographic data for series maintained by Peter Golla ().