Teaching "Tips": An Economic & Pedagogical Defense of Gratuities
June 22, 2017Auburn, Alabama
Join us at the Mises Institute at 10:30 a.m. CDT on Thursday, 22 June, for this free lecture presented by Anthony Gill, professor of Political Science at the University of Washington.
A few upscale restaurants in the United States recently have ended the practice of tipping their wait staff, preferring a fixed labor cost method of compensation. This attempt to change this long-standing cultural practice presents a fascinating opportunity to explore a variety of economic concepts including principal-agent problems, gains-from-trade, price discrimination, and cultural institutions designed to build trust. We argue that tipping remains an economically efficient means of providing quality service wherein restaurant owners, wait staff, and customers all benefit in a win-win-win situation. The norm of tipping also provides an excellent example to teach basic economic principles and foster classroom discussion.
The lecture will be presented in Condon Hall. Driving directions are here.
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