Quote:
Originally Posted by Rusemandingo
He's reaping the benefits of a tip subsidized dealing staff without paying his part of the cost.
Awice, you seem unable or unwilling to view this from a large scale standpoint. If you want to make your decisions based on what immediate benefit you receive for you actions, go ahead. Just dont be surprised when people give you grief and view you as a less than stellar human being.
I am willing to view the situation from any such standpoint, not merely within the individual frame. I will get to that in the second part of the post. But it must be explained to me why someone would tip without any such benefits applied to them. At best, this is irrational.
Consider your own views for a second. Did you make your view based on something you were taught while being socialized and then backwards rationalize it? Or did you think objectively about the situation and this position is the conclusion of such a thought?
In my mind, there is no rational reason for tipping to be equated to charity. It doesn't even satisfy the objectives of tipping itself. Charity can be lauded, but should not be obliged or even encouraged. In many cases, charity diverts the optimal allocation of resources.
In situations of service where quality can scale, it could be argued that tipping is merited. But in situations where service is relatively static and can't scale, a tip is not merited with respect to benefiting the consumer. This is precisely why I don't tip at eg. mcdonalds or the grocery line. Even in cases where service can scale, I don't think that tipping is completely appropriate - eg. clothing salesperson has items waiting for me. Their wage scales with my purchases (ie. commission.) This is okay.
I think that some activities have had a tipping culture weaseled into them; for example, compare tipping a bartender but not tipping the starbucks barista. Objectively, these activities are not very different.
Based on observation that a negligible number of people tip the person who scans their groceries and the premise that this is at least equivalent in work to many other jobs that do "merit" a tip (under a conventional understanding of the situation), we agree that most individuals are in fact making their tipping decision not based on objectivity but on social mores. (This includes me, and is part of the reason why I am anti-social; I dislike socially induced behaviors that inhibit my individualism.)
--
Now comes the second part, where I step back and consider the societal frame instead of just the individual frame.
First, social norms are an important part of culture, but also a mixed bag - in some ways they help, and in some ways they debilitate. Individuals, from socialization or otherwise, often have deep seated and usually irrational views that often have the effect of, or encourage cooperation; or rather, discourage individualism. This is usually good.
The reason for this is in fact self gain in a societal context -- eg. by making non-tipping "scummy", one discourages the practice. But this of course views the situation as a type of Prisoner's Dilemma. In some cases, this is accurate. For example, discouraging people from cutting a line and exercising proper queuing can improve efficiency of service, is a direct type of Prisoner's Dilemma. However, the analogy does not extend to all cases, as I will show at the end.
Firstly, we must separate scalable and non-scalable services. (By a scaled service, I mean a service with variable value.) A consequence of requiring a system to be Pareto is that services that do not scale should not be compensated by tips. (If services are uniform, employees should not be subject to consumer whimsy as to whether they get paid or not, since less variance is better than more.)
Secondly, in some situations where services do scale and I want to be a beneficiary of better service, I do tip generously. However, if someone does not tip in such situation I will not begrudge them. Again, benefits for tipping generally involve a tit for tat style strategy where you are treated better on your next visit. An individual who eg. tips meagerly is merely willing to accept the default level of service offered at that venue. Notice that because service scales, the service is proportional to the amount tipped, so there is no free rider problem.
--
It remains to discuss the question of whether non-scalable services are intrinsically a type of Prisoner's Dilemma, and whether society would be better off with such a system or not.
Firstly, tips are a very poor system of compensation in non-scaled services if the intent is for the market to operate well. It causes information asymmetry and variance in wages.
Secondly, tips don't have the type of protection that wages do. Because the only such protection is a social norm. This is actually good protection but it belabors the point about individualism - why should an individual pursue -EV objectives? It also, in my opinion, unreasonable at the very least, for people to try to discourage other options [such as not tipping] for their own benefit - it encourages a lack of rationalism.
Thirdly, the tipping system is likely protected by owners because it cheats or dodges taxes from the government. When you protect the tipping system, what you really are doing is protecting private profit. You are not protecting the workers because they will have to be paid a "fair wage" under any system (or there won't be a dealer sitting in that chair.)
Fourthly, the view that non-scalable services are a type of Prisoner's Dilemma loses a sense of proportion. Under any standard, the market will settle on the correct wage for eg. the poker dealer - namely, the lowest wage a qualified person is willing to accept. And because rake is intimately tied to hands/hr dealt, there is reason for owners to monitor hands dealt per down and fire dealers below a certain standard.
As a corollary, owners set the standards and the market sets the wages. This is a very notable fact that can best be explained through the following example: suppose tomorrow, people tipped on average 30% more than they usually do. In the short run, perhaps the quality of work is improved, and/or a worker will trend towards this line of work due to the increased wages. But in the long run, any increase in average tip is going to be met by corresponding decrease in wages, precisely because the owners set the standards they are willing to accept as best for their business and profit objectives.
(This argument ignores the fact that there is a minimum wage, which is very relevant -- our markets are not completely free. But at the same time, owners can get around this - for example making their employees independent contractors, so that dealers have to pay a fee to deal cards or whatever.)
This type of wage can also actually inhibit progress societally. This is because they are a type of market manipulation. For example, say under free market conditions, a company would hire 20 waitstaff at 25k a year. But because of this situation, they can only "hire" waitstaff at 50k a year. (They don't directly pay the 50k, but it is essentially the same since the costs are reflected in the final price in some way.) The extra cost burdened that they cannot cut, means that such a restaurant may not open, may not run, or may not hire as much. In general this negative result is true for arbitrary market manipulations. Now in a restaurant example, this may not be as relevant, but it is certainly relevant with respect to poker.
The entire point of this is that considering the societal perspective, if the question is whether everyone should tip versus no one should tip, I still completely affirm that "no one should tip" -- people should by default not tip, (except when they want to as an individual, free from social pressure.)
--
Cliffs: I don't tip at McDonalds.