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The Point of Tipping?
Yesterday, my newspaper was delivered with a stamped envelope for sending tips to the delivery person. I put a tip in the envelope. Feeling extra generous, I did not include my address. Explain. Shouldn't all tips be this way? Discuss.
Posted by Alex Tabarrok on December 18, 2008 at 07:03 AM in Economics | Permalink
Comments
You still get a newspaper? Weird.
I suppose if a person doesn't know who is giving them tips they will have to give everyone a little bit of extra service. So in tipping anonymously you benefit the person getting tipped and everyone they service. Assuming someone who delivers papers is going to think of this.
I wonder what extra service you could get in paper delivery. Maybe this isn't the best example.
Also, if your neighbors know you are giving tips anonymously, won't that encourage them to not give tips? Or if they don't give tips anonymously, won't they get all the extra service while you and everyone else get nothing?
Posted by: Jason at Dec 18, 2008 7:36:33 AM
People have some amount of good in them, they are not purely hedonistic creatures. Utility functions are not of the form u = c. Somewhere in the utility function, you care about others' welfare. People realise that as good as market mechanisms are, they're imperfect, and the societal utility will be higher if you give some of your money to the paper boy. The fact that he went to the trouble of asking for tips is indicative of this higher marginal utility to him and you acknowledged this.
Posted by: Enda at Dec 18, 2008 7:39:57 AM
Didn't Professor Cowen have a post on this, on how best to deal with bums? I think he called it 'rent exhaustion'.
Posted by: Michael Stack at Dec 18, 2008 7:47:48 AM
The idea of a gift is self-contradictory. If it's part of an economy of gift/debt, it's not a gift.
Derrida did a book on it.
Reviewed here, which might save time.
Posted by: rhhardin at Dec 18, 2008 7:59:21 AM
Was it Hemingway who said something about tipping behavior being the true measure of someone's soul?
Posted by: Alex at Dec 18, 2008 8:13:51 AM
You had some guilt feelings for that time when you decided to free ride on your neighbors painting big bold numbers on their curbs (post 5 Aug 2008) and decided to give a little present to your neighborhood by making an anonymous contribution to the paper delivery guy.
One problem with revealing your identity as a tipper, is that you sort of become locked into tipping forever. Discontinuing the tipping, perhaps because your overall tipping attitude has changed, could be interpreted as a statement of dissatisfaction.
Ideally, you should coordinate with your neighbors to take turns into tipping anonymously.
Posted by: londenio at Dec 18, 2008 8:28:14 AM
The explanation that makes the most sense is that you are Canadian and trying to make Americans feel selfish as Canadians are wont to do.
Posted by: Roger at Dec 18, 2008 8:32:03 AM
Explanation: Alex is overcompensating for not painting his house number on his curb.
Posted by: at Dec 18, 2008 8:50:05 AM
Herein we mix economic principles with theological virtues; apples/oranges.
The economics: (I guess) compensate for service, plus I do it to ensure the server, assuming I am a repeat customer, stays there and is adequately compensated. I again guess: the more cash turning over in the economy the better for all.
Theological: charity, love for God and for one's fellow. This has nothing to do with economics. Charity is not completely selfless.
Me: I still have delivered the WSJ which I pay for by credit card automatic billing. The "delivery person and me" relation is indirect. I received a Christmas card with my paper. I mailed a card with cash. I did not sign the card, but wrote the address. The issue for me was not whether the delivery person knew I gave him a tip, it was that no one else knew I gave a tip. No one here knows me.
I also attach (tape to an empty bottle) a card with cash for the Poland Spring Water delivery man.
Posted by: T. Shaw at Dec 18, 2008 8:50:44 AM
Oops, should have read all comments before pulling the trigger. londenio beat me to the punch.
Posted by: at Dec 18, 2008 8:51:20 AM
Alex-- Was the envelope addressed to the delivery person, or to the newspaper?
Is it possible that not including your address will mean that your delivery person will not receive the tip?
I do tend to agree with the idea that to be truly generous, one has to have the expectation that no benefit will accrue to oneself as a result of their giving.
Posted by: Matthew at Dec 18, 2008 9:00:20 AM
Ummm...so you gave a tip to the guy who delivers your newspaper. What do you want, a cookie?
Posted by: Tony at Dec 18, 2008 9:14:16 AM
Shouldn't all tips be this way?
Shouldn't economists avoid asking questions with "should" in them? That's what separates us from the rest of the social sciences.
Posted by: bartman at Dec 18, 2008 9:17:42 AM
Man, not only did at least two of you beat me to the house number joke, but I think you used it better than I had planned on doing.
Posted by: Bob Murphy at Dec 18, 2008 9:23:46 AM
Oh man, I almost forgot to promote one of my articles. I wrote "In Praise of Tipping" back in grad school. (And you libertarian-haters will be pleased to know that a few libertarians wrote critical emails to me, explaining that tipping was an offense to the memory of Ayn Rand.)
Posted by: Bob Murphy at Dec 18, 2008 9:26:13 AM
Thank you. The delivery person may wish to offer different levels of service to those who tip vs. those who do not. Since you mailed your tip anonymously, I may now freeride off your largess.
Posted by: ironman at Dec 18, 2008 9:31:54 AM
My guess is you did not leave your address because you wanted to leave a gift with no pretense of reciprocity (last night's episode of Big Bang Theory dealt with this issue, "You haven't given me a gift; you've given me an obligation!"). If anything, you did a big favor to your neighbors as the deliveryman may decide to increase everyone's level of service.
As far as should all tips be this way, I think not, as a tip is generally a reward for good service as well as a signal to the tip-ee that you are a customer who recognizes, and rewards, good service. This encourages good service (read: preferential treatment vis a vis your neighbors) in the future
Posted by: Zac at Dec 18, 2008 9:38:34 AM
They should, but if you're too generous, you're providing a powerful incentive for the recipient to try to identify you, violating the conditions under which you were willing to be so generous.
See here for the proper amount to tip, and for what, anonymously or not.
Posted by: Ironman at Dec 18, 2008 9:45:06 AM
No. There is no logical explanation. You will not get better service because of the tip. There are much needier people on the planet if you meant to be charitable.
Posted by: bjartur at Dec 18, 2008 9:55:15 AM
If you tip with your name/address attached, you are identifying yourself as an easy mark with excess disposable income -- not something you want to casually reveal to the world.
For similar reasons, one should think hard about giving to charities and political candidates because of the torrent of junk mail that will be received for years afterwards.
Posted by: ZBicyclist at Dec 18, 2008 10:03:38 AM
I confess that it is less clear to me what "better service" one could expect from a competent deliverer (than, say, the extra service I can get from a waiter/ress).
If the deliverer is already competent, the tip says thank you, but a card or just a penciled note could do much the same thing (ie - the marginal value of tip over a note may not be very high). If the deliverer regularly leaves the paper in the gutter or the rose bushes, I don't know that a tip is in order.
On the other hand, if the tip is really there to ensure that future papers don't end up in the gutter or the bushes, it's more of a protection racket than a tip, which is what I tend to fear more tipping has become. Tip or you're a bad person, rather than rewarding service above and beyond the call.
Course, all this ignores the warm glow effects that keep our smiles rosy at Christmas time.
Posted by: D. Watson at Dec 18, 2008 10:26:01 AM
Everyone else on this blog is probably smarter than me so this might not make sense. As previous commenters noted, tipping anonymously does a couple things... allows people to free ride, but also gives the delivery guy incentive to give good service to everybody because he doesn't know who sent him the tip.
if people take (uncoordinated) turns tipping anonymously, the delivery guy would be incentivised to give good service to all, right?
certainly makes sense short term. but what if the delivery guy gets expectations? that is, if in the long run the delivery guy has consistently gotten anonymous tips from alex or neighbors, wouldn't he just get used to it and then revert to some standard mode of service? he expects and will probably receive certain tips of this nature no matter what and thus the expectation of the tip can defeat the purpose of the anonymous tip. this is basically just taking a typical inflation expectations argument and applying it to this example.
what if everybody tipped, and gave their name? would this be like giving everybody in society a gun, so that nobody robs anyone?
what's better...everybody tipping and giving their name, or some people tipping anonymously?
Posted by: andy at Dec 18, 2008 10:49:10 AM
First, you value the delivered paper higher than price your pay for it. Second, you weren't sure if the amount would be considered appropriate or an insult and they know where you live. You satisfied your self interest of guilt relief and gaining material for your blog with minimal downside consequences. As altruistic as others see you, self interest drives much more giving than we want to admit. You also lessened the feedback information value of the tip, which is good if you don't know how well the tipped takes feedback and they know where you live.
But, perhaps the throwers marked the envelopes. In which case, you just got interesting material for your blog.
Posted by: Seth at Dec 18, 2008 11:44:16 AM
Now you've done it; we'll start seeing economists recommending Pigovian tax credits for anonymous tipping. Darn you and your positive externalities!
Posted by: Anthony at Dec 18, 2008 12:14:33 PM
The person who delivers the WSJ to my house also does this. And since he started doing it I have been sending an anonymous tip, in cash inside the card, directly to him. I do not do it to improve service, which is already excellent.
I tip because I was a paper boy for 5 years (age 11 to 16), and I get satisfaction out of doing it.
And if someone doesn't like what I do with my money, tough. Tell it to Fidel.
Posted by: at Dec 18, 2008 12:35:06 PM
