English, Article, Journal or magazine article edition: Why Do We Tip Taxicab Drivers? David Flath

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Bookmark: http://trove.nla.gov.au/version/16667
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • Why Do We Tip Taxicab Drivers?
Author
  • David Flath
Physical Description
  • preprint
Notes
  • The leading economic explanation for tipping -that is, explanation why the practice is socially beneficial, not why individuals leave tips even though it is not narrowly advantageous to them- is that it confers an incentive to provide personal services. This fits many instances in which tipping is common but does not fit the taxicab business very well. I propose a novel explanation for tipping that does fit the taxi case. It is that tipping amounts to Lindahl pricing of the services of vacant cabs (essentially, reduced waiting time), a local public good for taxi customers.
  • RePEc:dpr:wpaper:0738
Language
  • English
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