A few weeks ago, we covered ethics in my behavioral economics class at Cornell Tech. The case example below strikes me as tipflation + pure deception, which involve ethical issues stacked on top one another and put the end consumer in a terrible place (e.g., stating tip as 25% but providing an actual dollar tip amount that is even larger, say 38%, under the guise that it is actually 25%). First of all, the consumer has to determine what is fair and deserving to leave as a tip, and that is complicated in of itself because they often can’t judge how tips are split among the restaurant operations staff and other. Secondly, both tipflation and deception nudges likely prey on fast thinking psychological processes and may disproportionately affect those with lower numeracy (and possibly socioeconomic status). The nudge to “check your math” is likely moving in the right direction, but it takes reflective, slow thinking and a certain level of math skills and cognitive stamina (which could be additionally challenging if someone is cognitively depleted after a meal).
To recap some items we discussed in class, these include:
- Goal alignment between the nudger and nudgee
- Degree of control and influence of the nudge (e.g., to what extent a nudge invokes fast System 1 automatic thinking versus slower System 2 reflective thinking)
- Fairness considerations (e.g., moral foundation theory or organizational justice principles, such as procedural justice)
- Heterogeneous treatment effects (e.g., negative effects on those with lower socioeconomic status, numeracy, cognitive stress or depletion)
https://www.foodandwine.com/tipflation-restaurant-tipping-scams-8642517