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Economy & Business

Why Americans Can't Quit Tipping

A Denny's waitress delivers breakfast to customers in Emeryville, Calif. The tipped minimum wage has been stuck at $2.13 since 1991.

One of our listeners wrote in to ask why Americans are addicted to tipping and just can't seem to quit. This is a subject near and dear to our hearts: doesn't it seem like we're tipping everywhere these days? It's a also a great behavioral economics question. Tipping is one of those conventions that defies both common sense (why do we tip for some services and not others?) - and the rules of economics (why do most people prefer restaurants that don't include fixed service charges in their prices?). We asked Michael Lynn, a professor of consumer behavior and marketing at the Cornell University School of Hotel Administration, for a little guidance. Turns out tipping may be a kind of social madness for which there is no known cure.

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