Your analogy is too simplistic, so it misrepesents today’s situation
A better analogy of today’s would be so:
- Your rich friend and his 19 employees order 20 steaks
- Somehow and out of sight the rich friend takes 19 of the steaks, takes 9/10th of each steak for himself, and then replaces them with 19 derived kiddie meals containing 1/10th the steak.
- Your rich friend then points out that he and his employees only should pay for 2.9 steaks.
- The bill and cost remains the same (100 steaks), so the remaining 80 people foot the bill for 97.1 steaks.
>That only makes sense if you're consuming roughly the same amount.
In our culture's case, in general the amount each one ate doesn't matter -- whether one had steak and the other just a salad, the salad person can very well still go on and insist on paying for everybody else. Nobody would care about "a 15% to 30% difference in cost" (the person paying for everybody wont feel it's a burden, and the persons having their meal paid, wont feel like imposing).
It's not about achieving some perfect balance or fairness in any particular meal -- people genuinely want to treat others, and enjoy taking turns doing so.
It's only longer term one would care for patterns of behavior (the person who after so many meals with others never volunteers to pay etc).
I have had regular dinner with friends who liked to eat and drink a lot. Much more than I do. So I always ended up paying $50 while I myself consumed for maybe $20. Not once did any of the people who ate a lot notice that there were several people on the table who consumed only a fraction of what they consumed. Sharing is fine but I think it needs to be approximately even. You can't have people constantly taking advantage of this system and then accusing others of being cheap.
No, their entire model is based on the assumption that users could extract maximum value from the buffet (eating everything) but typically don't (have a normal- to large-sized meal, the supply cost of which is obviously far less than what the customer pays to get in). The parent commenter's point is that many businesses are run this way (eg. the gym is not equipped for 100% of subscribers to go to the gym every day, just as the buffet is not equipped for 100% of customers to eat a huge amount).
I agree that there is a difference, but I'll bet that larger people (in height, weight, or both) order larger meals, so you could make a case that not paying for the larger meal was discriminatory.
I agree that the meal analogy is not a great one, but I am using it because it was in the article, and another commenter replied to me with it. I try to avoid 'fighting the hypothetical' by changing the example.
The author's claim is that, if we split the price of our meal evenly, we'll all be better off than if we each pay for our own portion.
It may be true that splitting the price encourages us all to eat more, and pay less attention to price. That increases the demand for everything, and expensive options in particular (the lobster and filet mignon).
It's entirely possible that switching to a "pay-for-your-own-meal" model would reduce the amount of food people buy, and possibly even end with the expensive options being removed from the menu.
But our current situation isn't better for everyone--it's just better if you really like to eat, and especially if you really like to eat expensive things, because you'll be subsidized by the people who just get a salad.
Maybe I could save it by asking where am I likely to get a better quality burger: the place that charges me $5 a week just for burgers, or the one that charges me only $4 a week AND I get a whole lot of other stuff I don’t like but could still consume
Agree. A better food analogy would be like some all-you-can-eat 'consignment-style' buffet where a venue provides booths for vendors and charges customers an entry fee. Then at some point the venue realizes that customers are really liking one or two vendors, consuming a lot of their food, so the venue decides to also start charging those vendors people consume the most food from.
What about a group of people with different wealth profiles sitting at the same table? Would John who orders a steak and drives a Mercedes be charged $85 while Amy who drives a Honda Civic pay only $65 for that same steak?
Interestingly, the way me and my friends do it is to split the bill evenly as long as there are no far-off outliers (in either direction). So the people who ate hardly anything pay their part, the people who ate a ton pay their part (there's usually a max total of one outlier), then the rest of us split what's left.
Same, when out to dinner with friends, if I pay for everyone I will nag them to order the steak and every extra they might want, and if someone is paying for me I will try to pick something worth less than what they would have picked for themselves. I'm pretty sure they used to make menus with no prices for people like me. (It is common for my friends to also be generous and constantly try to get people to order more when they're the one paying. So I don't think this is a case of me being a Christlike figure of self-denial and the world being full of sharks. Economists just may not know enough good people.)
The "nonsense" I was referring to was the inability to dictate the terms of the sale. If a chef takes 2 months to develop a special dish for a very wealthy customer, you can be pretty sure that the price is going to be very high, and only the person paying the price will be enjoying the dish. Likewise, if the chef spends the same amount of time developing a special dish for general consumption, you can also be pretty sure that he/she plans on recouping those costs by distributing them across many customers' meals, the price of which is determined by the chef based upon how much the original cost was, and how fast he/she wishes to recoup the costs.
Exactly. If all menus were just "BLT, $5", "Hamburger with tomatoes, lettuce, and onions, $6" then you could make the analogy.
However, compare "basic facts" with an example from the menu from my favourite restaurant (www.chachachar.com.au) (and an example of fair use!):
"Eye Fillet Age 28-36 mths old Lean with sweet, clean, toasty flavours
Served with truffled mash potato, salad of grilled pear & pancetta with smoked tomato relish
Hereford sourced from fertile pastures of NSW raised on Cattle Care accredited properties that are managed under stringent quality & environmental systems and are finished on feedlots in Jindalee."
I disagree that this shows mathematical illiteracy. What you've overlooked is that eating at a restaurant is, in game theory terms, a repeated game. You have to analyze it in terms of multiple plays.
If I go into a restaurant on some random night, and their price list tells me a steak is $25, but they also tell me they are having a discount that night and I can have the steak for $20, then they have established in my mind that a steak at that restaurant costs $25, and that sometimes they offer discounts.
If I go in some other random night, and am charged $25, I'm OK with that. I've planned for it. I've decided my budget can handles a $25 steak. If I happen to hit some kind of discount night, great. I save some money.
Suppose instead the first time they charged me $20, but did not tell me that was some kind of discount. I see $20 printed on the menu, and no indication that the price is higher at other times. That sets in my mind that a steak at this place is $20. I expect now to be able to go in any time and get a steak for $20.
I then go in another random night, and it is $25. Now I'm not OK. I had planned on $20. They've stuck me with an extra $5 that I had not budgeted for. No I can't have popcorn at the movie I'm going to afterward. :-(
What it comes down to is that people want the "normal" price to be the highest price that the place charges. They can then plan for that, and if they happen to hit a sale, then they get a windfall. Windfalls don't screw up budgets. They are surprises--but they are pleasant surprises.
When the "normal" price is not the highest price, people get surprises, but not the pleasant kind.
When I go out to eat, I do not want unpleasant surprises. Hence it is more acceptable to me for restaurants to offer discounts on non-busy nights rather the surcharges on busy night. The former only gives me pleasant surprises, the latter only unpleasant surprises.
When I did not had much money, I consistently prefered cheaper option. 50-50 would mean that either my richer friends can not eat what they like due to me being there or I can not socialize with them as often. Alternatively they could pay more often, but it would be hard to keep that fair and I would not like leaching off theirs money either.
The same argument goes for buying steak versus buying a chicken meal. The costs are wildly different but the work is the same, why should I pay the waitress more for one versus the other?
A better analogy of today’s would be so: - Your rich friend and his 19 employees order 20 steaks
- Somehow and out of sight the rich friend takes 19 of the steaks, takes 9/10th of each steak for himself, and then replaces them with 19 derived kiddie meals containing 1/10th the steak.
- Your rich friend then points out that he and his employees only should pay for 2.9 steaks.
- The bill and cost remains the same (100 steaks), so the remaining 80 people foot the bill for 97.1 steaks.
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