Once you're familiar with the prisoner's dilemma game, you start seeing it everywhere. One thing I argue among my friends is that tipping waiters is a prisoner's dilemma, with tipping corresponding to defecting.
overview the prisoner's dilemma, it's a game where two (or more) people
are given a choice to cooperate or defect. Defecting is the "selfish"
option, in that it leads to more favorable outcomes for the defector at
the expense of the "total" good. It's not possible to sum up multiple
people's preferences in a straightforward way (see Arrow's impossibility theorem), but the one thing that's for sure is that if everyone defects then everyone is worse off.
the usual association of defection with selfishness, it may seem odd at first
to say that giving money away freely counts as defection.
Nonetheless, this is what I claim. If you live in a culture where
everyone tips, and you choose not to tip, then your reputation will take
quite a blow. You may save a little money, but it is not a favorable
outcome for you.
And when everyone tips, it creates a tipping culture. And that makes everyone worse off.
the waiter's side, it doesn't actually increase pay (since non-tipping
wages are simply adjusted to compensate), but rather increases
variance. On a day where the restaurant is understaffed, or where
customers are stingier, or where the chef is having a bad day, waiters
might earn less.* It's also not clear why pay should be proportional to
meal prices rather than proportional to working hours.
*I don't have any experience, I'm just speculating.
the customer's side, it makes restaurant prices less transparent. It
increases time calculating bills. It requires greater use of small
change, since it prevents restaurants from charging round-number
prices. And while it might possibly improve waiter service, one wonders
why we don't feel the need to give discretionary pay to anyone else.
Perhaps white-collar workers could also be more productive if assigned a
boss who assesses the quality of their work hour to hour and pays them
accordingly (or not at all)? Perhaps it would be even better if they had a rotating set of bosses with inscrutable whims?
In short, tipping has a
prisoner's dilemma structure, in that tipping benefits you personally
but when everyone tips it creates a harmful culture.
do not mean to say that you should not give tips. Rather, I would
first suggest that sometimes defecting from a prisoner's dilemma is the
morally correct thing to do (as I've argued in the past),
despite being "selfish" in some sense. However, it would be nice if
there were some top-level action which forced everyone to cooperate.