Social Norms and Economic Behavior

Gelf Magazine looks at research on how social norms affect economic behavior, e.g. how conventions about how to split a restaurant bill change what people order. Do people take advantage of their dinner companions when the bill is split evenly and order more expensive meals, or do social conventions prevent them from exploiting such arrangements?:

Money-Grubbing, by Hadley Robinson, Gelf Magazine: What's the best way to split a restaurant bill? Should each diner pony up personal costs, taking into account tip and tax? Or is it better and easier to just split the check evenly?

A study ... tested that question. ... The finding: How you're going to pay directly affects what you order. Research subjects chose the cheapest grub when they were paying individually. When splitting the bill evenly, they ordered pricier items. When paying nothing at all, their consumption went up even further.

Gelf caught up recently with Uri Gneezy, one of the three economists who conducted this experiment. Gneezy is ... at the University of California, San Diego. We talked about ... economics ... [and] the importance of social norms...

Gelf Magazine: Why did you do this study?

Uri Gneezy: ...It is a nice demonstration of negative externalities. ... In this case, the fact that I consume more has some externality—it has some effect on you based on the additional cost that you have to pay for it. ...

GM: Your research subjects didn't know each other. Why would it make a difference if you were with friends...? Because you care more about them?

UG: I don't think it's because you care more, but because you know you can get away with it once, but next time ... he'll eat the lobster... You'll pay for it later on. That's why I expect it to be different with people you know well. ...

GM: What are the social implications of the results?

UG: In economics there is a big discussion about negative externalities: ... Traditional economic theory assumes people are selfish. Then there is a new line in economics that ... many times people do care a lot about others. Some of the lab findings ... claim we do think about others when we make decisions. That may be true in the lab, but that is not what we are finding when we go out in the field. ... Negative externalities are important... People are selfish ..., just like the traditional economic theory predicts. ... I think we show that there is more to the original economic theory than new experiments claim: that people are in fact selfish and react strongly to economic incentives.

GM: Have you done other studies on this?

UG: I'm doing behavioral economics. I have a bunch of studies like this. It's ... a very active research area. Here's an example of another study: Imagine that you have kids in a daycare and you need to pick up kids before 4 pm... Parents tend to come later and later, and the teacher wants to improve on that, so she gives a fine to parents that come more than 10 minutes late. The fine was about $2 in Israel for coming late. Before that, the social norm was to be on time, but when we made it some sort of market transaction, it became OK to be late. People think, "OK, if I'm late, it costs $2. I'm not violating social norms by being late." The effect of the fine was to make more parents come late. Before it was, ... [g]ood people don't come late. Now, suddenly if you pay $2, then it's fine to be late. You put a price on the social norm and the social norm is much weaker than it was before. ...

We know very little about social norms. We know intuitively that fairness is important. Every child can tell you that social norms are important, but how does this affect economic behavior? ...

GM: What is the social norm in the restaurant scenario?

UG: The social norm would be if I'm ... going to affect you, I should take it into account. I shouldn't be selfish. You go out to dinner with friends, you hope they won't change what they consume just because you are going to pay part of it. It wouldn't be fair. ... Sometimes people care a lot about social preferences, but when you go to the financial market, people care about it much less. ...

GM: What variations might there be in behavior based on geography, age, culture, or anything else?

UG: I think age is important... Also, culture can matter. In Germany, for example, they count down to the last penny. In Israel, if you do this, ... [y]ou'll get a very bad reputation for calculating up to the last cent. The cultural issue is very important..., you're a cheap guy who would care about stupid things like the last 10 cents. ...

Here's an essay written for the Palgrave Dictionary on social norms. A small part:

Norm enforcement. Broadly speaking there are three different mechanisms by which norms are held in place.

Some are sustained by a pure coordination motive. If it is the norm to drive on the left, I adhere to the norm in order to avoid accidents. If gold is the commonly accepted currency, it would be a waste of time to try to conduct my business with glass beads. These are “social” phenomena, because they are held in place by shared expectations about the appropriate solution to a given coordination problem, but there is no need for social enforcement.

Other norms are sustained by the threat of social disapproval or punishment for norm violations... If queuing is the norm, I will be censured if I try to push my way to the front. If dueling is the proper response to an insult, I will lose status in the community if I do not challenge the one who insulted me. If I am expected to avenge the murder of my brother and fail to carry it out, I may be ostracized by other family members. (Exactly why third parties bother to express disapproval or carry out punishments is a matter of debate, but the evidence suggests that they sometimes do so even at considerable personal cost ...)

A third enforcement mechanism arises through the internalization of norms of proper conduct. If it is the norm not to litter, I will avoid littering even in situations where no one can see me. If I eat a meal in a foreign city and fail to tip the waiter, I need not fear the consequences because there is no continuing relationship; nevertheless I may think the worse of myself for having done it. More generally, norms often take on the character of virtuous or right action (Hume [1740]...), and departures from a norm can trigger emotions of shame or guilt even when third party enforcement is absent... This fact is especially useful in large-scale societies, where it may be difficult to monitor the behaviors required for equilibrium.

Comments

[Idaho_Spud]

I get the filet mignon regardless of who pays ;)

[real person from the real world]

Whenever I go somewhere with someone else paying the bill or splitting it with me, I try to choose something similar or that same as what the other people are ordering. I always thought that was the polite thing to do. If I go with someone splitting the bill evenly, usuallly, but not always, I am with friends who would order something similar.

Other times, people generally opt for separate bills, as no one likes to pay for someone buying caviar while everyone else buys salad. However, I have some experience: I worked as an AD for a big advertising firm, at one time, and once a year we were given money by the company and our group would go out to eat. I had no complaint about the fancey restaurant our CD insisted we go to, but usually ordered the cheapest thing on the menu, while some guys would order huge pitchers of beer that would, of course, be added to the finally bill. One year, another AD had the guts to complain, and I did too. Yes, some people will seek any opportunity to get extra advantage at someone else's expense. Sorry, but despite the games to see how people psychologically react, it is RUDE.

[ndd]

This article is a good example of the last step in the scientific method, which is, what conclusions should be drawn from the result? In this case, the results make perfect sense, but the conclusions stated in the lead paragraph of the magazine article (and even in the published study itself) are far too broad.

From the lead paragraph: "What's the best way to split a restaurant bill?...A study ... tested that question."

Not true. The study only made use of groups of 6 complete strangers. Thus the correct lead should be "What's the best way for complete strangers to split a restaurant bill?" Indeed, further down in the interview the author concedes that among people who aren't strangers, his results probably don't hold.

From the study itself:
In recent years, ... a wealth of laboratory evidence has questioned the descriptive validity of the selfish agent assumption.... We find that, in line with the classical model’s prediction, subjects consume more when the cost is split, resulting in a substantial loss of efficiency.
These findings have implications in the design of institutions. ... Even when individuals prefer to be in a “different game” (e.g., pay the bill individually instead of splitting it), when forced to play according to a less preferred set of rules, they will minimize their individual losses by taking advantage of others.

Again, not true. I see nothing in these results not explained perfectly well by the idea of "strong reciprocity" (the idea that individuals hate to be taken advantage of, and will take action to their own immediate detriment to ensure that doesn't happen). Nobody in this study "took advantage" of anybody else; rather, they took steps to make sure they themselves were not taken advantage of.
In this study, the three choices, in likely order of preference, were:
(1) order modest meal, pay fair price.
(2) order expensive meal, pay fair price.
(3) order modest meal, pay unfair price.

Strong reciprocity means that people will take steps to ensure that outcome (3) doesn't happen. The way to do that is to make choice (2). When everybody chooses (2), everybody pays a fair price and nobody is taken advantage of.

Moreover, the day care example appears to contradict the entire premise of the article. Correct me if I'm wrong, but doesn't classical economic theory predict that increasing the cost of showing up late will decrease that behavior?
The daycare example also nicely demonstrates a point I made about classical economic theory not being "falsifiable." Our experimenter, faced with the contra-indicated daycare result, simply says, "Aha! What has really happened is that one cost (social disapproval) has been replaced with another cost ($2). The actual cost is now cheaper, so the behavior increases. Viola! Neoclassical theory is correct!"

[robertdfeinman]

The open question is does such selfish behavior also exist when the stakes are higher and does one's "conscience" play a bigger role?

Right now we are having such a moment in the US. The negative social pressure on those who consume energy wastefully (think SUV's) is increasing as is the opposition to NIMBY concerns over things like wind farms. Cigarette smoking is also a good example, it has taken 50 years for the attitudes of the majority of Americans to shift on this. Perhaps this shows that attitudes don't really change, just that those holding the old ideas die off and are replaced by those holding the newer ones.

If that is true than it shows the importance of socially responsible education. Robert Altemeyer's work has demonstrated how the attitudes of conservative college freshman can become more liberal as they move through school if they are exposed to others with more liberal points of view and if they meet people not from their in group.

[Bernard Yomtov]

There is a transaction cost issue here as well. Trying to have everyone pay for their own food leads to a half hour spent adding and subtracting, passing the bill around and trying to decode it, remembering what you had, deciding how the wine should be divided, figuring taxes, etc. Then it ends up wrong and you end up with the wrong amount of money in the pot and someone either takes a loss or makes a profit.

It's worth overpaying by few dollars to avoid all that.

[real person from the real world]

Thoughts on cigarettes.

There was a time, when films showed elegant people smoking. If you look at old movies or remember them, it is there. Then, it was realized that cigarette smoking could make you sick. I say "could," because while I would accept the now common knowledge that smoking is bad for you, my father smoked everything from cigarettes to pipes, and died of prostate cancer in his nineties. Obviously the ill effects are not as demonstrateable and depend on genetics as well.

I do notice the "health conscious," consumers who shop the stores marketing "healthy foods" (Whole Foods and the like) are generally highly well paid elites living in the far suburbs "for the kids" and driving shiny huge SUVs, while ranting about the environment, and who will humilate anyone who appears to offend their sense personal space with something that is NON-healthy. Individual ego in action as much as anything.

I have asthma, and have never smoked and I don't like smoking. but most of the poor souls who smoke are less well paid, and less educated who got addicted years ago, and haven't been able to quit. For them, it has become a new way of marking them as targets who just want to take money out of someone else's pocket for health care, never mind that the health news is recent, and smoking goes back to the discovery of America.

[robertdfeinman]

About smoking:
I think people always knew it was not a good thing, this is why young people were discouraged from smoking. It is also why the ads promoted things like "less irritation" than their rivals. It is also why ads in the 1930's and 1940's showed doctors endorsing smoking.

People's fears wouldn't need to be assuaged if they didn't already exist. One could raise an interesting question about human behavior. If people continued to smoke after the full health effects became well known then one could cite the addictive properties as an explanation. So how do we explain those who persist in unhealthy eating habits? Can one get addicted to french fries and Coke?

It seems to be that people just tend to ignore indirect risks and minimize their likelihood. There are also studies which show that people also overestimate the probablity of unlikely risks.

[ndd]

rdf:
If you look on the right side of your screen, under the heading "Things you might want to read", the first entry currently is about behavioral economics and diet quality. It addresses the point you are raising. Why people choose to eat a particular diet is a somewhat complex issue, but it is safe to say that if McDonald's and Burger King automatically included a small helping of fruit and vegetables in their value meals aimed at kids, a whole lot of people would learn a whole lot of good eating habits early on (and it is probably no coincidence that endemic obesity coincided with the rise of fast food outlets whose meals consist of meat and fatty carbs, and their replacement of family restaurants that included sides of vegetables).

[cm]

Perhaps we can draw the meta-conclusion that the "researchers" pushing such "theories" are in good part asocial types whose system of values/merit is centered around the concept of everything being a "market transaction" with the purpose of extracting as much momentary utility/gratification in any given scenario as will pass, and furthermore view utility in currency units. There is a German proverb that goes, "what I think and do, I expect of others".

My experience with advantage-taking in (non-anonymous) cost sharing schemes indicates that it always perpetrated by the same few individuals. Over time this gets figured in by others trying to avoid them in voluntary cost-sharing activities. It appears to be a matter of upbringing and consideration.

With splitting lunch bills among colleagues, I have occasionally seen that somebody who ordered out of line gets a break on the bill or is asked to pony up more, esp. when the bill does not divide evenly.

Then people have different habits, e.g. some are always ordering a drink when others do with water, and whether they would do it when on their own I can of course not observe ...

[Meh]

Lots of issues here:

1) Maybe I just lived in a different part of Germany, but there wasn't so much "counting down to the last penny" there.

2) There's a whole issue about dietary preferences in there that hasn't been controlled for. There's a whole set of people who for reasons of health or preference will (for example) order the chicken or vegetarian option on a menu whilst others will order the steak. Steak is almost invariably more expensive. Or for example if you take me out at a particular lunch time I won't drink much alcohol, because I've got stuff to do afterwards, where if it was evening I might drink more.

That's not to say that controlling for this issue will produce different results, but not to control for them rather makes the study little more than coin tossing.

3) ndd has already remarked upon the "stranger danger" issue at work here. I don't think many people have claimed blanket altruism between apparently comparable strangers is the lynchpin of criticism of the "selfish neo-classical model" so the conclusions feel like attacking a strawman.

4) Finally, as ndd notes, the problem with this whole defense of neo-classical setup is that of epi-cycles. If all you do is posit behaviour as the result of "fear/greed" you can always pile up competing "fears and greeds" to explain any behaviour. The question is whether this is a useful generalisation and whether larger models actually take this fine-grained approach (largely, they don't.)

[cm]

Meh: Well, in my own experience as a German, Germans are quite miserly, including myself, but of course individuals and local/group cultures differ.

The splitting-the-bill phenomenon I know mostly from the US, and then mostly in a context of immigrants. My remark about accounting (somewhat) for differences in orders was in that context.

In Germany, the restaurant cost-sharing I know was usually of the form of paying for prearranged business meals with non-cashable vouchers, or dining on a limited budget (i.e. you can order until collectively the budget is reached, or pay out of pocket beyond).

Perhaps that would be a different game, as you are enjoying yourself on a sunk cost.

[wjd123]

Norms and efficiency. It remains to be explained why a dictionary on economics,in contrast to sociology or law, should bother with an entry on social norms. What economic purpose do they serve? The answer is that norms coordinate expectations, and thereby reduce transaction costs in interactions that possess
multiple equilibria (Wärneryd, 1994).--Palgrave's dictionary

Wouldn't this be true only in situations where expectations can be coordinated. For instance, I have a business contract with Joe. Joe and I know that if the contract is violated we both have recourse to legal action. Besides, Joe is an old college buddy whose family I know. Everything about Joe tells me that he takes contracts seriously. That his fear of retribution is secondary to his sense of duty. I can feel sure in my expectations that if I sign a contract with Joe, he will honor it.

I also do business overseas. I have little expectations of ever being able to having those contracts enforced.

I also suspect that the proper respect is more important to my business associates than their sense of duty. I worry that they might resent the hard bargains I negotiated. That they might see these negotiations as a sign of disrespect and that they are harboring resentment toward me. Compared to my dealings with Joe by expectations are low.

As the goods I ordered come in I find that they are not to my satisfaction. That my business associates have cut corners every chance they got. For my purposes the goods I receive from them are practically useless.

I'm dealing with another culture with different norms (in the widest sense). Norms aren't going to help me reduce transaction costs. I can always do business their way. But that is as likely as not to add to my transaction costs, deference can be expensive in negotiations.

Expectations have to be mutual.

Here is another problem. I come from a society where the autonomy of the individual is honored, they come from a society where cooperation trumps autonomy. Autonomous individuals internalize norms when they see them as good and legitimate. Both feelings add to their motivation to obey them.

Social pressure to go along to get along can do the same, motivate people to obey, but there is a difference in the kind of motivation that can't be overlooked, the legitimacy question is more likely to be presumed.

Business cultures to get cooperation often offer rewards and punishments to curb the autonomous spirit. When they do so are they undermining wider social norms that people see as good along with the spirit of democracy? Are they charging society for their lower transaction costs?

[Esben]

ndd, in the case of strong reciprocity, would there really be any need to protect yourself against outcome 3? If everyone prefers outcome 1 then there would be no need to up the stakes. There has to be at least one person who is suspected to break with option 1 and go for:

(4) order expensive meal and pay too low a price

Besides whenever you order something you wouldn't have ordered on your own money, you are in a way taking advantage of others - even if they are doing the same. It is a kind of mutual exploitation working to the detriment of everyone. You can of course chose to call it something else, or indeed spin it as just a way to avoid getting exploited, but I think that is just semantics.

[Esben]

ndd, in the case of strong reciprocity, would there really be any need to protect yourself against outcome 3? If everyone prefers outcome 1 then there would be no need to up the stakes. There has to be at least one person who is suspected to break with option 1 and go for:

(4) order expensive meal and pay too low a price

Besides whenever you order something you wouldn't have ordered on your own money, you are in a way taking advantage of others - even if they are doing the same. It is a kind of mutual exploitation working to the detriment of everyone. You can of course chose to call it something else, or indeed spin it as just a way to avoid getting exploited, but I think that is just semantics.

[wjd123]

We have a winner in the category of best costume design. The award go to Stochastic Perturbation for the movie "Random Disturbance."

A second implication is that, due to stochastic perturbations, norms occasionally shift, and these shifts tend to be quite rapid compared to the long periods of stasis when a given norm is in place. This is the tipping or punctuated equilibrium effect (Young, 1998a).--Palgrave's Dictionary of Social Norms

[xfire13]

On a lighter note:
This problem has been solved by a few Caltech physicists:

Caltech Physicists Successfully Split The Bill
http://www.theonion.com/content/node/52324

[ndd]

Esben, basically I agree with your first point. I was listing the three options that it seemed a non-selfish person might consider. The fourth, of course, would be the preferred opiton of a freeloader.

I don't think the second point is semantics at all, though. It's not that the person wouldn't order the more expensive meal on their own, it's just that it would be their second preference -- irl they'd let go after the waiter/waitress sweet-talked them into it!

[Peter Baum]

rdf,

Your comments about unlikely risks are correct. Interestingly, though, people tend to systematically *underestimate* the risks of rare events with a historic probability of 0. It's a real problem for the insurance industry. This phenomenon, called catastrophic myopia, can be found in sports betting. I got to exploit it b/c no major league baseball team had ever gone from worst to first in a single season. But clearly it can be done. So how do you judge the odds? The fine folks in Las Vegas certainly didn't know how, so in 1991 the 150-1 Minnesota Twins (1990 last place) played the 250-1 Braves (1990 last place) in the World Series. Let's just say, I made what I thought was a lot of money and the bookies really lost a lot of money.

Catastrophic myopia also played a role in the hedge fund collapses of the late 90s, though there wer obviously other factors as well. Frighteningly, it bodes ill when we think about nuclear war...

[Esben]

Well ndd, in order for the outcome to end anywhere but in outcome 1 there has to be at least one person willing to - or suspected to be willing to - exploit the others by ordering a more expensive meal. I think we can agree thus far?

Let's say that you are eating out and would ordinarily go for 1. However, now you want to insure yourself against outcome 3, because of the presence of a suspected freerider, and thus you go for 2.

However by doing this you are taking advantage of all the other moderate orderers. Assume there are 10 people eating. Since you don't want to be cheated by the freeloader who ordered 20 dollars more than the norm, so you also order for 20 bucks more than you normally would. However, the freeloader will only carry 2 dollars of cost on that, so he is still making a damn good deal on his own 20$ over-order. You yourself will also carry a 2 dollar extra cost on your excessive order, so you come out heavily on top. However the 8 other people will bear a combined cost of 16 dollars on your excessive order, - even if they are themselves placing moderate orders. So in order to protect yourself from exploitation from the one freerider, you are thus yourself exploiting the 8 non-freeriders.

Let's review again what the article stated: "they will minimize their individual losses by taking advantage of others". This is in fact exactly what is happening. They are minimizing their losses to the freerider, but taking advantage of the remaining diners. If you were NOT prepared to take advantage of others then you would let the freerider be a jerk, but still in solidarity with the remanining 8 diners place a moderate order. Everyone would pay a little extra for the freerider, but nothing too dramatic. So strong reciprocity alone can't really explain this tendency towards over-consumption.

[Esben]

NDD, to elaborate on my previous comment I would say that strong reciprocity only works as an explanation when there are two and ONLY two diners. Because that way there are no negative externalities that affect your ability to punish a cheater without punishing/exploiting others as much (three diners) or more (four diners or more).

Of course if you are only two people, you are probably on a date and you want to impress her, so you end up paying for all of her lobster ;o)

[ndd]

Well, esben, to cut to the chase, I part company with you in your first paragraph. To not have outcome 1, it is only necessary that you don't know whether someone could be a cheater or not. And since the experiment was tested with strangers, that's what we have.

Also, even among groups of friends, part of the conviviality of the evening is the loosening of the pursestrings to enjoy oneself. If the set-up of the experiment promotes that, the strangers may feel, so much the better.

In order to sort out the question of "taking advantage of others" vs. "avoiding being taken advantage of by others", I think we need a better experimental design. When you get the funding, let me know.

Cheers.

[Esben]

ndd: "To not have outcome 1, it is only necessary that you don't know whether someone could be a cheater or not."

I did very explicitly point to a cheater or someone suspected to be a cheater. So if that is where you part company with me, I don't think you understood what I was trying to say.

Here's the catch which I tried to convey (and you didn't comment back on): Actually one cheater (imagined or real) should NOT be enough to spoil outcome 1 if people reacted on strong reciprocity alone. No one operating in this way would punish fellow moderate diners with a 16 dollar cost, simply to punish the cheater with an extra cost of 2 dollars. It wouldn't make sense. So strong reciprocity can NOT explain a tendency for people to over consumer under a paid-sharing scheme if there is more than 2 diners.

So the article was in right when it said that in this given situation people ARE willing to exploit their fellow diners, whether it's in order to protect themselves from exploitation or simply because they like a free ride.

As far as I can tell the research design is fine, or at least your criticisms against it are a bit off the mark. Of course it doesn't answer all questions (and it doesn't pretend to), and perhaps repeating similar experiments with people with existing norms and dynamics could be interesting - although I'm not entirely sure what you'd expect to get out of it. Or perhaps your ideas for a different research design are different still? When you get the idea, let me know and I'll try to get the funding.

ndd: "Also, even among groups of friends, part of the conviviality of the evening is the loosening of the pursestrings to enjoy oneself. If the set-up of the experiment promotes that, the strangers may feel, so much the better"

But that has already been controlled for. They compared different set-ups and found that different paying schemes led to different levels of consumption. So no matter how good or "loose" the atmosphere was, the individual diners still went more lavish when everybody paid for their consumption.

[wjd123]

If the friends have different income levels those on a tight budget aren't going to enjoy the evening as much if they worry about busting their budget. The low income people will probably insist on seperate checks so they can control their costs. For them, this would be an important part of enjoying the evening.

If the dinner party want these lower income friends to be part of the group's restaurant outings, the rules of how to split the check will have to change. Thoughtful friends would work out these changes in advance.

[ndd]

Esben, one last time into the fray:
Assume I only care about one thing and one thing only: not to be taken advantage of. If I choose the expensive meal, I cannot be taken advantage of. If I choose the moderate meal, I might or might not be taken advantage of. Even if I don't give even a moment's consideration to harming the other diner, I choose the expensive meal. QED, I think,

In order to rebut strong reciprocity, the experimenter has to allow the possibility of reciprocity, which means more than one test of the "game." Otherwise, you have a situation where nobody can try out being trusting first before protecting themselves from being taken advantage of. Hence, I didn't say the experiment proved strong reciprocity, I said it was consistent with strong reciprocity. Run the dinner club two or more times, and if diners still choose the more expensive meal the first time out, now you're talking about something.

wjd123: When I am confronted with going out with lower income friends, I always suggest ahead of time: how about we go to restaurant X, and I'll pay for the meal, you pay the tip? I've found it almost always bridges the awkwardness.

Cheers.

[Esben]

ndd, you still haven't addressed my point (and I sense you probably won't). But here goes anyway: How do you reciprocate against 9 differently acting people at the same time?

If 2 people try to exploit you by ordering an expensive meal and 7 people don't, then how does a person acting on strong reciprocity act? Exploit the 7 to protect himself from exploitation from the 2? Or exploit no one and be exploited himself? If the diners do indeed order the expensive meal then they "..will minimize their individual losses by taking advantage of others", won't they?. There's no getting around that one, really. Is it consistent with strong reciprocity to exploit some to get protection against others? You didn't seem to think to in your first comment to the article, so this seems to be a good case against strong reciprocity as you defined it.

Perhaps the dynamics will change with more dinners, as people get to know each other. But probably more so because they develop mutual sympathy, than because reciprocity suddenly comes into play. Because seen from a game theoretic perspective it shouldn't change much if you take them out for dinner twice or thrice, due to the problem of backward induction. If the diners suspect that person X will cheat in the case of only one dinner, then they must also assume he will cheat in the last dinner (since there are no more dinners in which he can be punished). But if everyone knows that cooperation will break down anyway on the last dinner, then they might as well go all out on the SECOND last dinner. Since no one expects cooperation on the second last dinner they might as well order expensive on the THIRD last dinner... and so on. So that research design wouldn't really help against the problem that you have in just one dinner. Your subjects would have to think that they were going on an endless row of dinners for your plan to work.

But anyway, why do we need several dinners to test reciprocity? Going to dinner is not a one-off decision making game. First you order a drink, then perhaps a starter, then dinner, then more drinks, then perhaps a desert, maybe a coffee and cognac to finish of the night. And you can even change your own order (or add garlic bread on the side) if you happen to go first but sense that others' orders are bigger. So there is plenty of opportunity to reciprocally adjust your own "play" to how the other's are playing.

[Wendy]

When I know that somone else is sharing the cost of my meal, I tend to order a low-cost meal.

[Patricia Shannon]

I ask for a separate check so I can order what I want and can afford w/o taking advantage of someone or having to pay more than I can afford.