Restaurant Tipping and Consumer Behavior: An Economic Theoretical Analysis

In this chapter, I applied the theory of consumer choice to model the relationship between restaurant
tipping and consumer behavior. Using this model, I demonstrated how consumer behavior responds
to restaurant tipping and how tipping affects consumer-utility among different types of consumers and
economic efficiency. The economic theoretical analysis reveals that tipping discourages customers’
demand for restaurant meals, which in turn creates bigger excess burden in the market.