The Point of Tipping (was "Cheap Bastards")

May 25, 2007
Posted by Jay Livingston

At Marginal Revolution, a blog that seems to be run mostly by economists, a post about tipping
has been provoking much response. Tyler Cowen, the original poster, got right to the central question.

The best way to understand tipping is to go to a restaurant you will never patronize again. Once your meal is over, when she is not looking, leave your tip not on your table but rather on another table she served. That way she still gets her money and you have in no way ripped her off.

That is psychologically tough to do.

We will never come back to the restaurant; we are never going to see this waiter or waitress again. Why should we care what they think of us?

From purely economic perspective, tipping is not rational, and it’s interesting to read the responses of hardline economists twisting themselves in knots to explain how, ultimately, tipping really is economically rational.

But the simpler explanation is that we are social beings, not merely economic maximizers. If you want to understand tipping, you’re better off reading Erving Goffman and not the standard Econ 101 text. We do care what others think, even anonymous strangers in public settings. Even when there are no real consequences, we follow the norms of self-presentation.

The payoff is not to our pockets but to our self-concept. You don’t want the waitress to think you’re a cheap bastard because you yourself don’t want to think that you’re a cheap bastard. At least one commenter at Marginal Revolution tells of deliberately not leaving a tip, but he feels obligated to give a long account so that we won’t think that this cheap bastard is a cheap bastard.

I don’t know if the research has been done, but what do you think would happen if you asked people to rate themselves as tippers — below average, average, above average? How many would say that they were below average tippers? People, even economists,
want to be able to think of themselves as generous.

A couple of years ago I was talking with a student, a slightly older (late 20s) woman who had at some point in her career worked as a waitress, and somehow the conversation got around to tipping. “I always leave a good tip,” she said, “on a $12 check, I might leave a $5 tip.” And she was by no means wealthy. Her income was certainly far less than mine. I was an 18-20% tipper —average, right? But suddenly I felt like a cheap bastard.

What’s an extra dollar or two on a $10 lunch tab or cab fare — what would you do with that money anyway. And it turns you from an average 20% tipper to a generous 30% or 40% tipper.