Credit: Sara Clifton
Left: Average reported tip rate in American restaurants over time, according to the NPD group (1982-1984) and Zagat annual surveys (1989-present).
Right: For conventional tip rates below some critical threshold Tc, a rational restaurant owner would allow diners to leave gratuity to maximize profitability (black curve). Beyond that critical threshold, a rational restaurant owner would disallow tipping in their restaurant (red curve).