Study participants rated menu prices with an automatic percentage service gratuity as better deals than equivalent service-included prices when the service component of price was below the standard 15% tipping rate. However, the reverse was true when the service component of price was above 15%. Furthermore, a move from percentage service gratuity toward dollar service gratuity impeded participants’ menu price judgment. These findings provide some insights regarding which pricing alternative to tipping should be implemented if and when restaurateurs decide to abandon voluntary tipping.
BurmanB.BiswasA. (2004). Reference prices in retail advertisements: Moderating effects of market price dispersion and need for cognition on consumer value perception and shopping intention. Journal of Product & Brand Management, 13, 379-389.
3.
HseeC. K.LoewensteinG. F.BlountS.BazermanM. H. (1999). Preference reversals between joint and separate evaluations of options: A review and theoretical analysis. Psychological Bulletin, 125, 576-590.
4.
KeppelG.WickensT. D. (2004). Design and analysis: A researcher’s handbook. Upper Saddle River, NJ: Pearson Prentice Hall.
5.
KwortnikR. J.LynnM.RossW. T. (2009). Buyer monitoring: A means to insure personalized service. Journal of Marketing Research, 46, 573-583.
LynnM.WangS. (2013). The indirect effects of tipping policies on patronage intentions through perceived expensiveness, fairness, and quality. Journal of Economic Psychology, 39, 62-71.
8.
McCallM.LynnA. (2008). The effects of restaurant menu item descriptions on perceptions of quality, price, and purchase intention. Journal of Foodservice Business Research, 11, 439-445.
RaoA.MonroeK. (1989). The effect of price, brand name, and store name on buyers’ perceptions of product quality: An integrative review. Journal of Marketing Research, 26, 351-357.
WangS. (2013). The effects of price partitioning and its implications for menu pricing (Doctoral dissertation). Cornell University. Retrieved from http://hdl.handle.net/1813/33947
