TITLE:
Modeling the Relationship between Restaurant Tipping and Consumer Behavior
AUTHORS:
Tin-Chun Lin
KEYWORDS:
Restaurant Tipping, Consumer Behavior, Excess Burden
JOURNAL NAME:
Theoretical Economics Letters,
Vol.5 No.3,
May
27,
2015
ABSTRACT: The theory of consumer choice was applied to model the relationship
between restaurant tipping and consumer behavior. Using this model, we showed
how consumer behavior responds to restaurant tipping and how tipping affects
consumer-utility among different types of consumers and economic efficiency.
The theoretical analysis reveals that tipping discourages customers’ demand for
restaurant meals, which in turn creates bigger excess burden in the market.