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Eh, how is variable pricing a source of profit for the restaurateur? Their profit is calculated on a fixed price. Also from what I’ve observed in the US, everyo

Eh, how is variable pricing a source of profit for the restaurateur? Their profit is calculated on a fixed price. Also from what I’ve observed in the US, everyone is morally obligated to pay a tip… Rich people may go above and beyond the average (citation needed) but having tips arguably does not raise demand from more modest people, since they are still expected to pay base price + tip. There is no real price segmentation at play as far as I can tell… Modest people also eat out in Europe or in Japan, where morally mandatory tipping does not exist, so there is that.

red_trumpet 5y ago
> Eh, how is variable pricing a source of profit for the restaurateur? Their profit is calculated on a fixed price. More people dining means more profit probably. > (citation needed) Yes, that may indeed be a problem.
- arcturus17 5y ago
  > More people dining means more profit probably. I gave a precise argument to why I think tips do not increase demand for the service - most people in the US, regardless of wealth, pay at least the minimum tip. GP's argument that there is a substantial price segmentation would only hold if poorer people did not pay the tip.