Customers are more likely to tip when paying by cash rather than by credit; customers dining alone are less likely to tip than customers in a group; men are more likely to tip relative to women when paying by cash

Cash or Card? Impression Management and Restaurant Tipping Behavior. Vikas Kakkar, King King Li. Journal of Behavioral and Experimental Economics, January 17 2022, 101837. https://doi.org/10.1016/j.socec.2022.101837

Highlights

•Customers are more likely to tip when paying by cash rather than by credit.

•Customers dining alone are less likely to tip than customers in a group.

•Men are more likely to tip relative to women when paying by cash.

•The visibility of cash tips is exploited for impression management by customers.

Abstract: Existing literature in economics and psychology has documented that impression management is an important motivator of human behavior. However, most of the existing evidence is based on laboratory experiments, where the concern for impression management is artificially induced. We hand-collect a unique data set on restaurant tipping and use the mode of payment to discriminate between impression management and other possible motivations for tipping in a naturally occurring environment. The impression management hypothesis predicts that consumers will tip more frequently when paying by cash, relative to paying by a credit card, because their tipping behavior can be publicly observed and enables them to foster a positive social image. Our three main findings are that (a) the probability of tipping is significantly higher when paying by cash; (b) customers dining alone are significantly less likely to tip and tip significantly lower amounts when paying by cash; and (c) men are significantly more likely to tip and tip larger amounts relative to women. These results are broadly consistent with the impression management hypothesis.

Keywords: Social imageimpression managementmode of payment