Diner's Dilemma - Explained
What is the Diner's Dilemma?
Written by Jason Gordon
Updated at March 27th, 2023
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What is the Diner's Dilemma?
Diner's dilemma refers to a situation where several participants in a game strive to get the highest reward but end up destroying themselves. In a bid to come out with the best result, players in a game put one another in an unpalatable situation. Diner's dilemma occurs in other contexts aside from games.
Back to:ECONOMIC ANALYSIS & MONETARY POLICY
When Does Diner's Dilemma Occur?
Diner's dilemma is otherwise called an unscrupulous diner's dilemma. This dilemma occur when a group of people who go out to dine decide to split the cost equally between them even before ordering their meal. Seeing that the cost will be shared by all the participants, members go ahead to eat expensive meals and not the cheap ones. In the long run, the group pays more for the meal that they thought they would. Ordering expensive meal as against what each participant would have ordered if the bill was not split is influenced by human psychology. This act eventually puts all the participants in an unfavorable position as they end up incurring higher risks and expenses.
Example of Diners dilemma
The most common scenario where the diner's dilemma occur is in a dinner setting where people agree to split costs. Although many people have experienced this dilemma at one time or the other, the term diner's dilemma emerged much later. This is a good example of diner's dilemma in a real-life situation; Anna, Bran, and Bright are friends and decide to go out for dinner on an agreement that the bills will be shared equally amongst the three. At the restaurant, they are presented a menu list and need to decide what meal to eat, the three friends then opt for expensive meals even though they are not likely to eat such meal if the bills were not split. Based on their choice of meals, the friends incur more costs than they naturally would have.
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