When agents are ascribed selfish motives, economic theory points to grave inefficiencies resulting from externalities. We study a restaurant setting in which groups of diners are faced with different ways of paying the bill. The two main manipulations are splitting the bill between the diners and having each pay individually. We find that subjects consume more when the cost is split, resulting in a substantial loss of efficiency. Diners prefer the individual pay to the inefficient split-bill method. When forced to play according to a less preferred set of rules, they minimise their individual losses by taking advantage of others.
Interesting. The economists clearly thought it was not worth wasting their time on a GROSSLY irrational agent such as my late mother-in-law, Norma Levene. Norma's practice on going to a restaurant with a group of people was to order lavishly (issuing instructions for large plates of assorted vegetables, the sort of thing not normally offered on the menu), secure in the knowledge that she would not, under any circumstances, permit anyone else at the table to contribute a penny toward its cost.
An implication of the study, I take it, is that the presence or absence of someone perceived by others in the company to be numerate will have a strong effect on ordering habits. A split bill is appealing to those who lack confidence in their ability to perform rapid and accurate arithmetical calculations. If at least one person is present who is capable of performing these calculations, the group is presumably likelier to choose individual bills. (And an unscrupulous mathematician in a group of classicists will presumably order more lavishly than he would if the split bill were being used, confident that the cost can be redistributed unchallenged among his fellow diners.)