Quote:
Originally Posted by jeffman
Why don't they just raise the price and institute no tipping allowed
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Because we are a stupid people and we can't do math. If we look at a menu and see a burger for $17.25 and there is a mandatory 16% tip, we just think the burger is $17.25+tip. If we see a burger is $20 with no tipping allowed, we'll think "that's too expensive, it's $17.25 down the street at Joey's" and go there instead.
Sure, it's the same thing, but $20
appears more expensive and how things appear is how we make our decisions (which is why the burger would actually be $19.99, which is also why I made it $20 in my example).