Unscrupulous diner’s dilemma

The unscrupulous diner’s dilemma (or just diner’s dilemma) is an n-player prisoner’s dilemma. The situation imagined is that several individuals go out to eat, and prior to ordering, they agree to split the check equally between all of them. Each individual must now choose whether to order the expensive or inexpensive dish. It is presupposed that the expensive dish is better than the cheaper, but not by enough to warrant paying the difference compared to eating alone. Each individual reasons that the expense s/he adds to their bill by ordering the more expensive item is very small, and thus the improved dining experience is worth the money. However, having all reasoned thus, they all end up paying for the cost of the more expensive meal, which by assumption, is worse for everyone than having ordered and paid for the cheaper meal.

See also

Game Theory, Tragedy of the commons, Free rider problem, Greedy algorithms, Somebody else’s problem, Fiscal dumping

Material

• Glance, Natalie S.; Huberman, Bernardo A. (March 1994). The dynamics of social dilemmas. Scientific American.

Papers

• Gneezy, Uri; Haruvy, Ernan; Yafe, Hadas (April 2004). The inefficiency of splitting the bill. The Economic Journal 114 (495): 265-28