

Radiohead's Warm Glow (or how economists don't understand tipping) - chaostheory
http://www.nytimes.com/2007/10/14/opinion/14sun3.html?ex=1350014400&en=304f58c7e0c1a3a2&ei=5090&partner=rssuserland&emc=rss

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Tichy
I think that article was quite stupid. Sorry, but I didn't pay because I felt
like tipping. I paid for inrainbows for the following reasons:

1.) I want radiohead to make more albums, so I wanted to show them that it is
worth doing so. 2.) I want to hurt the RIAA (and other evil players) by
showing them that they are not necessary anymore. Ideally, the success of the
inrainbows scheme would lead to copycats, meaning more cheap and free music
for me.

I think those reasons are perfectly rational. It pisses me off (sorry, but
really!) if wannabe economists claim that rational beings should pay nothing.

Nor is tipping very puzzling: it guarantees that I get a friendly waitress in
the restaurant, because if she is treating me badly, there will be no tip. OK,
you have to think around several corners (ie pay it forward) to realize that,
but the whole society works that way. It is not an impossible train of
thoughts. If I don't tip, my fellow humans will suffer (angry cab driver), so
if they hear about it, they will punish me. I think in the US waiters even
come after you shouting if you don't tip.

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davidw
It's a bit more complex than that though...

You have to consider that your actions won't change the overall situation
much, unless you paid hundreds of dollars for the album. So, whatever happens
will happen with or without you paying. From that point of view, you might as
well save your money, no?

Of course, if everyone thought that way, things would go differently, and the
experiment would fail. So, yes, homo economicus is too simple, but does
provide food for thought.

I'm a lot happier with restaurants in Italy, where there is no tipping. You
pay a fair price for the meal, and that's that. Most of the time you get good
service, sometimes you get bad service, but not out of proportion to how
things are in the states or here in Austria. And the food is way better in any
case:-)

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Tichy
not much of a difference, maybe. But by the same logic, I did not pay very
much. It is not like I gave them half of my income or something. So I might as
well pay. I am not saying that it would be irrational to pay nothing, but to
say it is weird that anybody choses to pay at all is too much.

I also like it better without tipping, and granted, it would also work if
people just stay away from restaurants with unfriendly waiters.

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rms
It's guilt. People tip cab drivers and pay for music because of guilt. It's
funny though, I feel guilty stiffing a waitress but not for downloading the
album of my favorite band for free.

~~~
chaostheory
I think it's more about being fair.

I think one of Co-opetition's
(<http://mayet.som.yale.edu/coopetition/index.html>) main ideas has it nailed.
While this doesn't involve business competitors, it's still about players of a
game giving up maximizing their own individual gains, to share it with one
another

in this case we can think of the consumer as a player of a game where they
have three general choices:

a) maximum gain - pay nothing (assuming they don't buy anything else from
RadioHead; Radiohead loses big) and enjoy the music

b) minimal gain - pay what they think is full price (buy extra stuff, ...) and
enjoy the music

c) mixed gain - pay what they think is a discounted price (less than a cd) and
enjoy the music; neither Radiohead nor the consumer maximize their gains in
the short term but both of them benefit moderately. Radiohead has an incentive
to keep publishing hits and the customer can keep enjoying them (without being
robbed by the record industry).

~~~
karzeem
You nailed it. Because we live in a society whose rules we'd like for the most
part to uphold, we impose norms on ourselves and on others. Fairness is among
the most important of those, and it's the foundation of many others.

Check out the Ultimatum game (<http://en.wikipedia.org/wiki/Ultimatum_game>)
for another example of the same desire to keep people's dealings fair.

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Alex3917
Tipping is just a corner case of supply and demand, where the good being
demanded is supply.

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sebastien
excellent article. nice hope for the future thx

