A Modeling Framework for Tipping in the Presence of a Social Norm

• 成果类型: Article; Early Access
• 署名作者: Debo, Laurens G.; Snitkovsky, Ran I.
• 署名单位: Dartmouth College; Tel Aviv University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2021.03422
• 发表日期: 2025
• 关键词: decision analysis: theory; economics: game theory and bargaining theory; utility preference: theory

摘要

Tipping is a complex phenomenon cutting across various stakeholders-firms, customers, and workers. Analyzing the long-run impact of policies related to tipping is therefore challenging. To facilitate such analysis, we develop a modeling framework in which a tipping norm forms endogenously in a market consisting of a firm that offers service to potential customers. Customers choose whether to consume the service or not and, if yes, how much to tip the server afterward. With tipping, customers show appreciation to the server by sharing a fraction of their surplus but also undergo social pressure to comply with the prevailing norm. This tipping norm is shown to evolve endogenously through a dynamic process of sequential market adjustments over time: the average tip in each period determines the tipping norm for the following period, causing the firm to adapt the price and customers to adapt their tips accordingly. Characterization of this equilibrium outcome allows us to derive qualitative results on the long-run impact of different exogenous factors on tipping: we find that the equilibrium tip-to-price ratio increases when customers are more sensitive to social pressure, their range of service valuations spreads out, or they consider the service more valuable. Building on this framework, we further investigate several economic implications of tipping pertaining to social welfare, labor cost, and service quality, thus uncovering incentives and trade-offs to which the tipping mechanism gives rise from the firm, the worker, and the customer's perspectives.