EconPapers    
Economics at your fingertips  
 

The inefficiency of splitting the bill

Uri Gneezy, Ernan Haruvy and Hadas Yafe

Economic Journal, 2004, vol. 114, issue 495, 265-280

Abstract: When agents are ascribed selfish motives, economic theory points to grave inefficiencies resulting from externalities. We study a restaurant setting in which groups of diners are faced with different ways of paying the bill. The two main manipulations are splitting the bill between the diners and having each pay individually. We find that subjects consume more when the cost is split, resulting in a substantial loss of efficiency. Diners prefer the individual pay to the inefficient split-bill method. When forced to play according to a less preferred set of rules, they minimise their individual losses by taking advantage of others. Copyright 2004 Royal Economic Society.

Date: 2004
References: Add references at CitEc
Citations: View citations in EconPapers (16)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:ecj:econjl:v:114:y:2004:i:495:p:265-280

Ordering information: This journal article can be ordered from
http://www.blackwell ... al.asp?ref=0013-0133

Access Statistics for this article

Economic Journal is currently edited by Martin Cripps, Steve Machin, Woulter den Haan, Andrea Galeotti, Rachel Griffith and Frederic Vermeulen

More articles in Economic Journal from Royal Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley-Blackwell Digital Licensing () and Christopher F. Baum ().

 
Page updated 2025-03-31
Handle: RePEc:ecj:econjl:v:114:y:2004:i:495:p:265-280