When the bill is split evenly, each person orders more expensively than they would alone, so everyone ends up worse off.
Glance and Huberman's 1994 model. Each diner rationally orders the more expensive dish since they bear only a fraction of its cost, and all end up paying more for a meal none of them chose.
In practice
- Six colleagues at a team dinner order the wine list's middle range rather than the house wine, and everyone pays more than they wanted.
- A shared departmental budget produces requests nobody would make from their own.