Formal and informal services

DIFFERENT SITUATIONS require different rules. Social context determines when market or social rules apply, even for the same service.

- By Tony Samson

In his 2009 book, Predictably Irrational economist Dan Ariely gives as an example having a wonderful Thanksgiving dinner at the mother-in-law's place.

To show appreciation for the roasted turkey, does the satisfied guest pull out a hundred bucks and give this to his host? The social context in such a well-meaning gesture becomes the height of bad manners. (Do I look like I need your money?) Yet the same meal at a restaurant is not concluded just by hearty compliments to the chef or good ratings on the customer feedback form. There is a bill that needs to be paid. (And don't forget the tip.) In one case, a social situation like putting clothes in the washing machine by the wife is provided for free. (Next time, it's your turn.) In a market setting this same service (doing the hotel laundry) is charged.

Social relationships too can take on a commercial slant. Can the professional entertainer in a bar who becomes a regular partner still charge for her services? (We can do karaoke at home.) It is also possible for the fees to become even higher as the family expenses are folded in.