Sunday, May 2, 2010

Free refills are a factor of rent cost?

Tyler explains the economics of the free refill

the first-order economic prediction is that drinks are sometimes used to charge for table space in the restaurant, a'la the Lott-Roberts paper. The more that land costs, the more that table space costs the restaurant. New York City establishments are usually crowded. That means they want to keep on charging you for holding the table and that means no free refills.