Economically speaking, why do diners pay the same percent of tip (whether they buy a $20 or $100 bottle of wine) when it takes the same effort to uncork & pour either? Most restaurant...
Economically speaking, why do diners pay the same percent of tip (whether they buy a $20 or $100 bottle of wine) when it takes the same effort to uncork & pour either?
Most restaurant customers tip according to a percentage rule - between 15 and 25 percent of the bill. Diners who have dinner and a $20 bottle of wine usually pay the same percentage of the bottle price as diners who order a $100 bottle. I am trying to determine why diners still pay 15 or 25% tip on the amount of the bill even though it takes the same amount of effort for the waiter/waitress to open a 100 bottle of wine as it does a 20 bottle of wine.
Tipping is a practice that cannot be explained through material factors. In other words, the practice of tipping is not something that is done primarily in order to get some sort of material gain.
Economists such as the author of this paper have studied tipping in an attempt to determine why people tip. They have generally concluded that tipping comes as a result of social norms. In other words, people tip because it is expected of them and they do not want to suffer social sanctions as a result of failure to tip. The tippers are "buying" some amount of utility, but it is psychological/emotional utility, not any sort of material or tangible utility.
Thus, people tip the same percentage on these bottles of wine because that is what is expected of them and they are willing to pay the extra money rather than to incur social sanctions for breaking social norms.
Tipping is primarily done because it has become the norm in today’s society. Both parties are tipping the same regardless the price of the wine because it is what’s expected and they don’t want to be outside of the social norms and looked upon with social sanctions; so they pay more money to appeal to social standards.