eCommons

 

The Effects on Perceived Restaurant Expensiveness of Tipping and Its Alternatives

Other Titles

Abstract

Research on behavioral pricing has found that presenting the price of a product or service in separate parts rather than a consolidated whole can reduce consumers' perceptions of the total cost. That principle suggests that restaurants which charge separate fees for their food and service whether by voluntary tipping or an automatic service charge may be perceived as less expensive than those that include service charges in the form of an all-inclusive price. An internet-based simulation testing that idea found that participants rated restaurants with tipping or automatic gratuity policies as less expensive than restaurants that built the costs of service into menu prices. Furthermore, participants ordered more expensive meals when automatic gratuities were added to the bill than when the costs of service were built into menu prices. While the study was a simulation only (and no money was at stake), the industry's longstanding practice of setting menu prices with service charges extra is supported by these findings.

Journal / Series

Volume & Issue

Description

Sponsorship

Date Issued

2007-02-01

Publisher

Keywords

restaurants; behavioral pricing; tipping policy; expensiveness; service-inclusive pricing

Location

Effective Date

Expiration Date

Sector

Employer

Union

Union Local

NAICS

Number of Workers

Committee Chair

Committee Co-Chair

Committee Member

Degree Discipline

Degree Name

Degree Level

Related Version

Related DOI

Related To

Related Part

Based on Related Item

Has Other Format(s)

Part of Related Item

Related To

Related Publication(s)

Link(s) to Related Publication(s)

References

Link(s) to Reference(s)

Previously Published As

Government Document

ISBN

ISMN

ISSN

Other Identifiers

Rights

Required Publisher Statement: © Cornell University. This report may not be reproduced or distributed without the express permission of the publisher

Rights URI

Types

article

Accessibility Feature

Accessibility Hazard

Accessibility Summary

Link(s) to Catalog Record