he drinks a whiskey drink, he drinks a vodka drink

Like most single Americans between the age of 21 and 36, I regularly go out and drink with large groups of people. Wait staff at bars accommodate large groups by ringing an entire table up as a single check. However, in an informal gathering, people come and go at different times. They order different amounts of alcohol and food – some folks get one drink, some get three, some get zero drinks but nibble on a communal order of nachos.

The problem: how do you ensure that everyone tips enough?

I don’t mean paying for the right number of drinks (though that happens, too – it happened to us on Wednesday, with a Bacardi, a Bailey’s and an Allagash walking off without cash, and only Mark M’s generosity kept us from getting barred). I mean that floating, hazy notion of “a proper tip.” Between the total cash value of all drinks and the highest potential gratuity, there’s a nebulous zone of loose change.

This problem persists, even among the closest of friends and the smallest of parties, for a few reasons:

  • Varying priors. Many people disagree on what a proper tip should be. Some are happy with 15%, some insist on 18-20%. So if everyone’s got a different notion of what to tip, the final total will be very hard to predict.

  • Poor incentive structure.. I wouldn’t feel terribly guilty about stiffing the final bill by 80 cents, and I imagine most people are similar. Plus, doing so might make my own finances easier (I don’t have to break a bill, for example). But if eight people feel the same way, the final total’s nearly six and a half bucks shy of what it should be. I have little incentive to be scrupulous. And groups comprised of people with no incentive to do good always produce bad results.

  • Lack of information. If the check is in cash, it’s easy to contribute in secret. Even if you’re not hiding the cash you put in, all those folded bills become anonymous once they enter the general pile. Also, it takes a rare type of paranoia to keep an account of what other people in a large party ordered. So anyone can claim to have put in enough money.

  • Aggregate preference. If you have Arrow’s Impossibility Theorem painted on the ceiling over your bed like I do, you’ll already suspect that there might not even be such a thing as “what the group wants.” Individuals have preferences, sure, but it might not be possible to aggregate those preferences into a single Leviathan. I bring this up here because there might not be one real number that everyone in a dining party wants to leave as a tip.

So even if everyone’s friends, had a great time and loved their waiter, they might not agree on what an ideal tip is. Even if everyone agrees on what an ideal tip is, there’s no way to compel an exact accounting from everyone. Even if everyone makes an exact account, there’s nothing compelling them to be honest. And even if everyone’s compelled to be honest, there’s nothing that says the final total reflects the group’s aggregate will (if such a thing even exists).

It’s a wonder waiters get paid at all.

Potential solutions? Let’s deal with the problems one at a time.

Varying priors :: Dictatorial control. One person at the table decides what the proper tip is. Everyone chips in until she says the pot is full. This may sound graceless – we have an ingrained hatred of the word “dictator” – but this is usually what happens anyway. The person counting the money decides when to stop counting.

Poor incentive structure :: Remove options. Incentives only matter if you have choices; in the absence of choice, no one needs incentives to do anything. Dividing the check evenly among all diners bulldozes over this problem. People may grumble at paying for things they didn’t eat, but that’s the price of an imperfect solution.

Lack of information :: Mandatory disclosure. I’ve never seen this method implemented before; as far as I know I invented it. When you put money in for the check, you have to wave the bills over your head and announce the total in a clear voice that carries. After everyone’s contributed, tally up the money. If you’re short on the bill, whoever put in the least amount has to make up the difference. This not only prevents secrecy, it adds an incentive not to be the cheapest person at the table.

Aggregate preference :: ??? No idea. If you solve this problem, you’ve fixed what’s wrong with democracy. I’ll buy you and all your friends a drink. You cover the tip.

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One Response

  1. cocktail waitstaff should be tipped after everyround they bring. same for bartenders. not much,at least 50cents a drink/drinker moreorless depending on the establishment. this gets you better service as they know there is incentive to hustle to your table faster. at the end of the evening, you can settle the bill without worring about leaving the whole tip as you have tipped throughout the evening. still, a small gratuity at the end is still expected.

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