Restaurant Tipping: It is totally irrational that restaurant tipping is a function of the cost of the meal. By way of example, suppose two couples are seated at the same time at two tables next to each other. Each of Couple A orders a pasta dish for $25 with no sides or beverage other than water, while each of Couple B orders scallops for $50 with no sides or beverage other than water. The food server makes the identical number of trips to each table for the couples' respective meals (e.g., to take the orders, bring the food, take away the plates, and bring the checks). Under a tip-by-percent-of-meal-cost formula, Couple B will tip double what Couple A tips even though the food server did the exact same amount and time of work for each couples' meals. This makes no sense.
Real Estate Commissions: It is totally irrational that realtor commissions are a function of the sale price of the property. By way of example, suppose someone owns two condos (Condo A and Condo B) next door to each other, and lists them for sale at the same time with the same realtor. They are identical in every way, and they are put on the market the same day, each receive over-the-asking price offer the same day which are accepted, and both close without a hitch on the same day. The realtor did the exact same amount of work re Condo A as was done on Condo B, and spent the exact same amount of time on each. For whatever reason, the Condo A sale price was $100K more than the Condo B sale price, so the agent got a larger commission on the Condo A sale than on the Condo B sale. This makes no sense.
Implication: It's difficult to figure out what to do to remedy the restaurant situation. But, as to the real estate situation, there is no reason one should ignore the possibility of negotiating a different arrangement for the realtor's compensation. An hourly rate with a cap is certainly one option that many realtors likely would accept.
[EOP]
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