The Economics of Tipping
Tipping: Recap
A recap of tipping's economics, norms and reforms.
This lesson reviews the module.
Puzzle
Tips are voluntary yet widespread, driven by norms.
Function
They monitor and reward service, but imperfectly.
Problems
Bias, low base wages and tip creep.
Options
Service-inclusive pricing, pooling and clear rules.
Tipping with thought
Know local norms and tip for good service.
Treating tipping as a law
It's a social norm.
Key takeaways
- Tips follow social norms.
- They have flaws.
- Reforms exist.
- Local norms matter.
No recording for this one yet - EconReader can read it aloud for you.