Opportunism

I think opportunism happens most often in our day to day life. In these cases, the potential gain or loss is normally small. I think this is the reason why most people do not spend a lot of time thinking about tipping. After all a tip is almost always under 10 dollars. Everyone has been taught to tip 20% and that is about as much thought as people have given it. There is nothing forcing people to tip. It is opportunistic to not tip. Over the year’s people could save thousands of dollars not tipping. I tip, I always tip. There are two main reasons for this. The first is that I was caddy for 8 years, in which time most my income was from tips. I got a base pay of 18-24 dollars and was supposed to be tipped at least 120% of that. Meaning that after a round of golf I should have walked home with at least 39-52 dollars. It was common to be tipped at least 150% at the club I worked at. Most clubs pay their caddies about 40 dollars. That said member could always tip less. The main reasons for this were often not the fault of the caddy. If a member lost money from gabbling, was in a bad mood or was simply acting opportunistically they could always not tip.  This has resulted in me developing a sense of comradery with people who work for tips.

The second and better reason to tip is that not tipping can be very similar to stealing. Businesses that have employees that work for tips can and do pay them less than the minimum wage. Supposedly, tips will account for the rest. These places often have a tip sharing policies in which those who receive tips are supposed to share their tips with others, if they are not tipped they still have to share the money they supposedly got, which means that they may be forced to pay out of their own pocket. As an example, I will use a server in a restaurant.  Like my experience with caddying, not being tipped is not always the fault of the server. They are not in charge of cooking your food and they do not set the menu. This means that if you do not tip someone because you did not like the food, or that the food was not to your liking you a punishing someone who has not caused this. I do not mean to say that there is never a reason to not tip someone. There are many reasons why someone should not be tipped. I understand those reasons. But not tipping someone simply passing my own misfortune onto someone else. All of this means that no matter what I tip. I may tip more than 20%, but I make sure to never go below.


In the prompt were given there were three reasons not to act opportunistically. To be a “good citizen”, to act ethically, and finally in the hope, that “good things come out to those who wait” otherwise called karma. The first two are very similar, being a good citizen is connected to morals and/or ethics. I tip because of my belief that stealing is bad, which exists because of my morals. The third reason is different. It is saying that by “paying” or acting good now you will reap the rewards latter. If that is true, then acting like a good citizen is opportunistic. If I know or believe that good things happen to those who do good, then it is in my interest to do good. If someone believes that logic, then one should always help others. While that logic may result in the same outcome as someone who is giving a gift they are caused by two different frames of reference. Giving a gift does not benefit the giver. Karma means that both parties are rewarded. This means that acting in the interest of karma is opportunistic. 

Comments

  1. Professor ArvanSeptember 23, 2017 at 11:12 AM

    Let's consider tipping at the country club after a round a golf. Did members have a preferred caddy? Or were they randomly assigned to a caddy? In the first case, the economics is quite different - what we'll call a repeated game in the next Excel homework. In this case you tip to get good performance from the caddy in the future. This is the gift exchange model I discussed the first week in class.

    It is a different story if the member will never have that caddy again (or if it is unlikely for that to be the case). Then the tip is not to assure future good performance. Or so it would seem. However, even in this case, typically members pay a lot to be part of the club and they understand the business model that underlies the support of golf. So if the tipping had some general impact on the performance of caddies, there would still be a repeated game reason to tip generously.

    To get this truly to a one-off, the golfer would have to be playing elsewhere with no plans to return in the future. I expect the behavior to be unaltered, even in this case. But, after all, the members are probably pretty well to do and in the grand scheme we're not talking about a lot of money.

    You might find it interesting to know that when I was growing up we were taught to tip 15%. I wonder if that is NYC versus the midwest or if times have changed. I am more generous as a tipper now most of the time.

    Tipping wasn't really the behavior I had in mind when I came up with the line about good things come to those who wait. I was thinking more about shirking (taking leisure) on the job. The employee who doesn't shirking may get some benefit from that down the road, by developing a reputation as a hard worker. So i didn't quite get the karma stuff, but if you think it relevant bring it up in the class discussion on Tuesday.

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    Replies
    1. John Maynard Keynes Econ 490 fall 2017September 24, 2017 at 9:42 AM

      Members were only allowed to request caddies for tournaments. Most members golfed at least once a week which means that most caddies they had were assigned without their input. I think it is also important to note that all the caddies talked to one another. We all knew who tipped well, who did not, as well as who was and was not fun to caddy for. There were a little over 300 members at the club, about half of which golf regularly. If a caddy did not recognize a member’s name someone they knew did. After my first year as a caddy, I knew what each round was going to be like before I started. Looking back on it this knowledge effected how much work I would do. If I knew that I was going to caddy for someone who was miserable regardless of what I did I would put in less effort. The opposite is true if I was caddying for someone who tipped well, or who was entertaining to talk to.

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  2. Francis Edgeworth Econ 490 Fall 2017September 24, 2017 at 9:06 PM

    Thats why I love that some countries in Europe don't even have a tipping system. I would much rather have a bill that already has a tip like service charge. Some countries in Europe find tipping offensive as some employees think you are giving them extra money for doing their job. I also read an article once where a manager of a restaurant in the US removes tipping and instead pays its employees a much more competitive rate. The results were outstanding as moral and efficiency increased like wildfire. Maybe paying employees a better salary could be a better solution.

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