Abstract

Following the COVID-19 pandemic, many businesses have adopted new technology that prompt for tips during transactions. Consumers have become increasingly displeased with this increase in tipping prompts, as many complain they feel pressure to tip when they previously would have never been expected to leave a tip. This perceived pressure to tip motivated my study of how the presence of others can impact tipping behavior. Observation has been demonstrated to possibly impact an individual’s decision-making process; therefore, I hypothesized that observation will increase average tip amounts due to the heightened incentives of acting generously when observed. To further understand my hypothesis, I evaluated many studies exploring decision-making, social pressure, and determinants of tip amounts. I also analyzed my hypothesis theoretically, utilizing a utility function allowing for evaluation of various tipping scenarios. Finally, I distributed a survey to College of Wooster students, faculty, and staff allowing me to analyze changes in tipping behavior based on the presence of others. The analysis of the collected data yielded conflicting evidence for my hypothesis. However, my research provides important recommendations for future research of the social determinants of tip amounts as well as why future research will be important for policymakers and business owners alike.

Advisor

Mellizo, Philip

Department

Business Economics

Disciplines

Behavioral Economics | Econometrics | Economics

Keywords

tipping, social pressure, decision making, behavior, peer effect, altruism, prosocial behavior

Publication Date

2024

Degree Granted

Bachelor of Arts

Document Type

Senior Independent Study Thesis

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