What sustains social norms and how they evolve? The case of tipping

The paper presents a model of the evolution of social norms. When a norm is costly to follow and people do not derive benefits from following it except for avoiding social disapproval, the norm erodes over time. Tip percentages, however, increased over the years, suggesting that people derive benefits from tipping, such as impressing others and improving their self-image as being generous and kind. The implications to the norm of not cooperating with new workers who accept lower wages are discussed; the model suggests that incumbent workers have reasons to follow this norm in addition to avoiding social disapproval.Tipping; Social norms; Evolution; Conformist transmission; Conformity

The Review Process in Economics: Is it Too Fast?

Rewards for publications in good economics journals are very high, while submission fees and other monetary costs associated with submitting an existing manuscript are low. Consequently, the editorial delay (especially the first response time – the time until the first editorial decision), by postponing monetary rewards to publication, constitutes the major submission cost (from the author’s perspective). Reducing the delay will induce many additional submissions of low-quality papers to good journals, increasing significantly the workload of editors and referees. Moreover, the rejection rate will increase and cause papers to be rejected more times prior to publication, offsetting at least some of the shorter first response times. As a result, the efforts of many editors to reduce the editorial delay, while attracting more submissions to their journals, may have adverse effects from a social perspective, and the optimal delay might be longer than the current average of four months.Review process, refereeing, publishing, academia, research, first response times, academic review process

Who Do We Tip and Why? An Empirical Investigation

An important question about social norms is whether they are created to increase welfare; I address it by examining the characteristics of tipped and non-tipped occupations. Tipping prevalence is negatively correlated with worker’s income and consumer’s monitoring ability and positively with consumer’s income and closeness between the worker and the consumer. The results refute a common belief that tipping exists to improve economic efficiency by lowering monitoring costs. Tipping, however, is more prevalent when consumers feel empathy and compassion for workers and want to show gratitude for good service, suggesting that tipping might increase welfare if welfare includes psychological utility.Tipping, Service industries, social norms, social welfare, behavioral economics, feelings, emotions

The Academic Review Process: How Can We Make it More Efficient?

Recently many editors try to reduce the turnaround times of academic journals. Shorter turnaround times, however, will induce many additional submissions of low-quality papers, increasing significantly the workload of editors and referees, and the number of rejections prior to publication. I suggest several ideas how editors can shorten turnaround times and four ideas how they can still avoid frivolous submissions, thus improving the review process efficiency: higher submission fees; requiring authors to review papers in proportion to their submissions; using differential editorial delay – letting low-quality papers wait more; and banning papers from being submitted after a certain number of rejections.Academic publishing, first response times, editorial process, review process, refereeing

Citing reprinted material

Journal articles are sometimes later reprinted as chapters of edited books. The question whether citations of this material should mention the book or the journal has significant implications. I describe several advantages of citing the journal: it allows the readers to locate the material more easily and to handle it more conveniently (when it is available electronically); it gives a better signal about how important and updated the material is; and it gives the journal proper credit, which is important because journals are ranked based on citations. Finally, several reasons for citing the book are also discussed.Citing; Citations; Edited volumes; Collective volumes; Reprinted articles; Professional ethics; Professional standards; Academic writing; Edited books; Journals; Journal impact

Behavioral industrial organization, firm strategy, and consumer economics

The field of behavioral economics is one of the fastest-growing fields in economics in recent years. Not long ago this was a small field, but over the last decade or so, the field gained more recognition, and today it seems clear that psychological motivations and biases affect economic behavior in many important ways. Insights from psychology were incorporated in several areas of economics. This paper offers a short review of the application of behavioral economics to industrial organization, which can be denoted “behavioral industrial organization,” and on the relationship between behavioral industrial organization, firm strategy, and consumer economics.industrial organization; behavioral economics; strategy; firm strategy; business strategy; economic psychology; behavioral industrial organization; consumer behavior; consumer economics

Behavioral economics and socio-economics journals: A citation-based ranking

Journal quality is a major consideration for authors, readers, and promotion and tenure committees, among others. Unfortunately, most behavioral economics and socio-economics journals are not included in published rankings or in Journal Citation Reports. Consequently, no objective ranking of these journals exists. To address this need, a list of journals in behavioral economics and socio-economics was compiled, and the number of articles that cited each journal was recorded for the periods 2001-2005, 1996-2000, and 1996-2005. In all periods Journal of Economic Behavior & Organization was ranked first and Journal of Economic Psychology second. In 2001-2005 Journal of Socio-Economics ranked third.Journal rankings; Citation analysis; Behavioral economics; Socio-economics; Economics and psychology

The Effect of External Incentives on Profits and Firm-Provided Incentives Strategy

The article examines the firm's choice of incentives when workers face additional incentives (“external incentives”) to those provided by the firm, such as building reputation that improves the workers' prospects with other employers, or satisfaction from working well. Surprisingly, the firm might find it optimal to increase the incentives it provides following an increase in external incentives. Even if the firm reduces its incentives, however, total incentives unambiguously increase, leading to higher effort and profits. This implies that firms should try to increase the external incentives that their workers face; I suggest several ways firms can do so.Worker satisfaction; Personnel economics; External incentives; Worker reputation; Intrinsic motivation

The Social Norm of Tipping: A Review

Tipping is an important phenomenon, both because of its economic magnitude and because of the insights it suggests about economic behavior in general. It is closely related to several areas in economics, including labor economics, industrial organization, social economics, behavioral economics, and public policy. Unfortunately, no published article integrates and synthesizes the research on tipping. This makes it hard for scholars to get an overview of this research area without reading dozens of articles. The purpose of this article is therefore to give the readers the state of the art in the research on tipping. In addition to summarizing and synthesizing the previous research on tipping, the article includes many original ideas and suggests topics for future research.Tipping; Social norms; Consumer behavior

The implications of tipping for economics and management

Tipping is a phenomenon that illustrates the importance of social norms and psychological reasons in motivating economic behavior. People tip because this is the social norm and disobeying norms results in psychological disutility. Tipping is also economically important: in the United States alone, millions of workers derive most of their income from tips, and annual tips amount to dozens of billions of dollars. Tipping is also prevalent in numerous other countries around the globe. While tipping has been studied extensively by psychologists, it received very little attention from economists. To encourage other economists to research this interesting phenomenon, I discuss the implications of tipping for several areas in economics: social economics, behavioral economics, labor economics, and economics of information / management strategy. I provide many ideas for future research both as part of the discussion and in a concluding section.tipping; social-economics; behavioral-economics; social-norms; hospitality-industry; restaurants