The effects of party size and dining duration on tipping behavior

In this study, we propose a theoretical framework to explain how party size and dining duration affect tipping behavior. The framework suggests that both the party size and the dining duration effects are hill-shaped and thus should be modeled nonlinearly. We use data from a large-scale transaction database (n > 800,000) for a Norwegian restaurant chain to test the proposed effects. We also merge these data with information on waiter characteristics and customer ratings for the 60 pizza restaurants in the sample. In line with the theoretical propositions, the results show that party size and dining duration affect tipping behavior nonlinearly. The association between both variables and tipping is mostly inversely U-shaped. Yet both effects are contingent on each other, the size of the bill, customer ratings, and the presence of alcohol consumption.