Recently, a restaurant owner proudly told me that he served no bread.
Where are we going? To the cost of free bread.
Free bread has been around for a long time. At taverns, hundreds of years ago, the bread was a filler. Since all meals had one price, it helped the bottom line to serve less food and more bread. With people used to getting free bread, in the first restaurants the tradition continued. And when NYC restaurants tried to eliminate free bread with a ten cent cover charge in 1913, they faced a minor revolt from diners. Realizing their mistake, they backtracked and bread remained free.
Today’s “Free” Bread
Having just arrived at your table in a small neighborhood bistro, you nibble on some bread and butter as you look at the menu. By starting to eat, you just gave the server some extra time to take and place your order. But also by delaying the meal, you’ve diminished table turnover. You might also though drink more high-priced alcohol. On the other hand, having downed the bread, you might not want a dessert that could help the restaurant’s bottom line. Or, dessert could slow down the meal which takes us back to the turnover the restaurant wants. And finally, that bread could cost a small restaurant $100 a day or 55 cents a roll.
Involving the sacrifices a decision creates, cost refers to more than money. So you can see that serving bread not only takes us to the money that the eatery spends on it, but also to time and turnover, to alcohol that might or might not be ordered and even to the good will that might rise with the bread (sorry, couldn’t resist).
Our Bottom Line: The Prisoners’ Dilemma
Because customers expect bread, the cost of not serving it could be the good will you sacrifice. It is possible though to diminish the bread expectation.and that takes us to the prisoners’ dilemma.
The idea of the prisoners’ dilemma begins with a police station. Assume we have two prisoners that are separated when they are arrested who know the punishment for the crime would depend on who did or did not confess.
Based on the diagram (below) of the prisoner’s dilemma, to minimize jail time, each has the incentive not to confess. However, denial could bring the longest jail time if the other person spills the beans. On the other hand, confessing could be a ticket out the door if the other burglar denies the crime. Psychological studies of the prisoner’s dilemma indicate the length of the sentence shapes the response. The longer the sentence for keeping quiet when one’s accomplice talks, the greater the tendency to confess.
Similarly, for free bread, we have one restaurant hoping that the others will stop serving it. And, because the restaurant owner with whom we began owns a Thai establishment where bread is rarely served, his prisoners’ dilemma is minimal.