It does not make you insane, but it does violate societal norms. Cab drivers expect to be tipped and thus charge lower prices than they otherwise would without the tipping norm. Society is dependent on thousands of unspoken rules being followed in order to function properly. It’s kind of odd that you would choose to signal that you are the type of person not to follow those informal rules. I suppose being contrarian is more highly valued among economists.
“I’m completely stumped by the force of Brad’s initial post and by the fire in many of the comments. Mario explicitly says that he *does* tip, so where’s the sociopathy? In his claim that he tips small? We don’t know what he considers big and small in the way of cabbie tips, do we? Because he mocks himself for tipping? What, no one has a sense of humor anymore? Is it taboo to question the institution of tipping? That’s hardly a liberal attitude! So where is all the heat coming from?”
I think the fierce reactions on DeLong’s page may be a clue to why we tip. It is a signal to third parties that you will cooperate and not defect. I don’t recall seeing that explanation before, but it’s not my area and I might be unconsciously plagiarizing something I’ve read in the past. Anyone know the literature well enough to say whether this explanation is out there?
Here’s a big surprise, DeLong edited my comment. Here is what appears at the moment I am writing:
I’m completely stumped by the force of Brad’s initial post and by the fire in many of the comments. Mario explicitly says that he *does* tip, so where’s the sociopathy?
[As you know, Mario says that the reason he tips is because he is weak, and that he wishes he were strong.
That’s the sociopathy, as you know very well.]
Two things are worthy of note here. First, DeLong has a lot of gall to call others sociopaths when his behavior is so dishonest and abusive. Second, DeLong adds the words “as you know very well.” Thus, he is like the experts in Berger & Luckmann’s The Social Construction of Reality. These experts disparage outsiders through “nihilation,” saying that the outsiders do not own the truth, we insiders do. And, “Deep down within themselves,
they know that this is so” (p. 116).
After a private email in which I said, “In the future, if you don’t like my comments, please do me the favor of deleting them entirely,” he apparently made my request retroactive by deleting both comments in their entirety.
I’m an “outsider” having only briefly been to New York and not a part of this apparently shared (and bizarre) more of tipping taxi drivers. Tips should convey your contentment for good service, but as it seemingly has become the status quo, it has lost this basic purpose. It is no longer a tip but rather an additional fee for not being sworn at. We can call it the “no verbal agression” fee, or perhaps the “prove to Mr. Delong that you’re sane” fee. Might as well get rid of the tip culture and charge more if it really suplements low rates.
I can recall discussions of tipping in non-repetitive dealings. There is a view that it is not “rational.”
More troubling, however, is voting. Jack Hirshleifer had an unpublished paper on the topic and he thought it “irrational.”
Kennneth Arrow famously asked why people do not cheat when they are not being observed. I’m afraid increasingly they do so.
Robert Barro has studied religion’s role in economic development for many years. The last time I heard him expound on the issue, he reported results showing that belief in the afterlife is important for truth-telling. And truth telling greatly facilitates economic cooperation.
Interesting about the afterlife, Jerry. Shame vs. guilt? On voting, I kind of think Brennan and Buchanan got it right when they said voting is expressive, so I’m sure why voting is troubling. Because voting is expressive, we are probably better people on average in the voting booth than in the rest of the world!.
“Because voting is expressive, we are probably better people on average in the voting booth than in the rest of the world!.”
Except we don’t vote in public.
I see tipping as an incentive system that we collectively participate in. I tip but I definitely tip according to quality. I hope other people will do it too. It’s a sort of exception to the prisoner’s dilemma.
Why do we do it in non-repetitive cases? Two reasons: a) in some cases, one may fear some form of retribution, I suppose, b) more importantly, you generally don’t know in advance whether the situation will be repeated, i.e., whether you’ll get the same driver, and c) it’s been my experience that people like to avoid the displeasure of others if they can.
Brad DeLong’s post is not really about the topic of tipping as many people seem to realize. It cannot be about me really because we have never met or spoken or even had much in the way of email contact. It seems that he is using me and others in order to lash out at what he sees as an immoral force masquerading as an intellectual position. I have never accused DeLong of anything other than being mistaken about a particular issue. I follow Karl Popper in trying to evaluate arguments on their own merit regardless of the motives of the proponent. I will continue to do so.
The problem of DeLong’s post is not that he disagrees with Mario’s post (which I did not even take AS serious as DeLong seems to have taken it).
The problem with DeLong’s post is that he repeatedly called Mario all kinds of nasty words. Obviously questioning tipping behavior is breaking his social norms, while calumny and public harassment does not. That is worrisome.
I just want to point out that on the upper right hand corner of his blog there is a button with the title “feed the grad students” where anyone can tip Mr. DeLong. Maybe he just has a thing about tipping in particular.
There is some significant literature on tipping and its effects on productivity from a principal-agent problem. Here’s an interesting question, if tipping becomes some kind of social norm where you feel obligated to tip or else, doesn’t tipping function change altogether and the incentives it originally created disappear. I can testify that in Europe tipping is very rare. It does exist particularly in the restaurant industry when you engage in repeated dealings with the same server or bartender over some period of time. But, at the same time, as I said, it’s very rare because people are being paid much higher salaries (higher minimum wages in Europe particularly in France) as opposed to in US where people in the service industry have lower wages. Consequently, the service is deplorable. That’s why most Americans think the French hate them because the service is awful ….what they ignore is that the service is awful for everybody and even worse in Paris because Parisians hate everybody (and not only the Americans or tourists). When I came back to defend my dissertation a few years ago, I was shocked of how bad the service was (and I am not even American even though I was having coffee with Americans and talking with them). But, I realized what I told my students, they are automatically paid much higher so the incentives to provide a good service are low particularly in places with a lot of tourists. On the other hand, I can testify that in other regions more rural regions not so affected by tourism, tipping is more common and the service is better even if people are still being paid more because of higher minimim wage. Similarly, in US, you can notice significant difference in the quality of service in restaurants where gratuity is mandatory for big tables.
So returning to my original question, if tipping became some kind of social norm, it is like paying them a higher wage and therefore the service will be awful and now the only way to get a better service is to give a higher-than-average tip. So the actual tip is not longer 18%-20%, it’s anything else about 18%-20%. If you do a good job, I given you more than 20% tip, if you do a poor job I give you 18%-20%.
Actually, going to NY, I noticed that taxi cabs I took don’t offer the possibility not to offer a tip when you pay with your credit card. I do not know the answer but I would assume that with an increasing number of people paying with credit cards (and thus automatically tipping), the quality of cab services has decreased since.
As for Erica Cartman mentioned by Kyle, he certainly has a better understanding of economics as the father of Matt Stone (South Park creator) is an economist. He actually was our department chair at Metro State College of Denver 15 years ago (just an anecdote),
What I know about academia and academic decorum could be written on the head of a very small pin, but I do know that in business, a sales rep (for example) who treated colleagues (and especially customers/clients) the way DeLong treats fellow professors would soon be an ex-sales rep, and probably not work again in his industry, and maybe not in any industry.
A colleague of mine was fired for a lot less.
Why the heck isn’t DeLong at least called on the carpet by his department head (or appropriate university administrator) about his foul-mouthed blog, and given a warning or told to clean up his act? It reflects poorly on Berkeley, even if Berkeley is home to a lot of intellectualoids, who think their proverbial sh*t doesn’t stink.
This point has nothing to do with free speech, freedom of expression, and the first amendment.
And as far as Mario’s mental health is concerned, I suggest talking to Dr. Szasz, who forgot more about various psychoses than DeLong ever knew. I’m guessing Mario gets a clean bill of “mental” health. Whether DeLong gets one, I’ll leave to others to decide.
DeLong’s invocation of Smith is particularly sad. I’ve only read Theory of Moral Sentiments once, but I don’t remember Smith saying anywhere in it that our “‘sympathy’ makes us eager to make every act of market exchange we engage in a win-win deal.” Forget for a moment the subjective value differences of trading partners, and think about the schizophrenia implied in DeLong’s statement. For a well-meaning person to even attempt to make every act of market exchange he engages in a win-win deal would mean he must be two people at once. He must be both buyer and seller at the same time, for there is no way an individual can know precisely that his exchange partner was completely satisfied. DeLong stretches Smith’s sympathy to fit a bloated, 20th century science fiction conception sympathy, and then he takes it all for granted. He’s wrong to do so, and I see more clearly now why he wears an exasperated frown in debates and public appearances. He’s straining his mental powers to the limit trying to become someone else.