How can it be selfish to split the bill?

18th July, 2009

Dear Economist,
In your books and columns you have claimed that when people split the bill equally in restaurants they tend to take advantage of each other by ordering expensive dishes. I wonder if this is really true. Wouldn’t friends be more considerate of each other?
Considerate restaurant-goer, London

Dear CRG,

The “diner’s dilemma” you describe is a kind of prisoner’s dilemma, and in theory people should behave exactly as I have described. But many laboratory experiments suggest we are not as selfish as economists’ models claim. So you are right to ask for more evidence.

The economists Uri Gneezy, Ernan Haruvy and Hadas Yafe have been looking into this. They seated various groups of six diners at a nice restaurant in Haifa, Israel, and noted how they responded to different payment schemes. Some ate for free, and they ordered a lot. Others paid for their own order, and they ordered sparingly. Between those two extremes were those who split the bill with the other five diners: they took advantage of their fellow diners, as I would have expected.

Perhaps they were somewhat inhibited by the embarrassment of free-riding, though? It seems not. When the experimenters, in a further trial, told diners that they would pay one-sixth of their individual bill only, they faced the same costs of over-ordering as in the “split the bill” case, but if they made extravagant choices their dining companions did not suffer. Yet they ordered much the same as in the “split the bill” case, suggesting that saving money for fellow diners was not much of a consideration.

It’s worth emphasising that this experiment seated strangers together, not friends. Perhaps people are more generous when it comes to friends. Or perhaps they are simply more careful about their reputations.

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