Taking Out the Competition
By Bryan Caplan
Two resolutions of the take-out paradox that I’m not buying:
1. Fairness, best expressed by Nathan Smith:
Maybe different prices for take-out and dine-in would be perceived as “unfair” by customers, and undermine business. Or maybe the restaurateurs themselves feel that would be “unfair.” Perhaps there are restaurateurs out there who say to themselves, “Ah, if only I could raise prices for dine-in customers, to cover the extra expenses! But one can’t sacrifice one’s honesty for the sake of profit.”
This fails to answer the key question: Why doesn’t someone set up a high-end restaurant that only does take-out? It’s hard to see anyone complaining about fairness if it’s a different establishment altogether.
2. Take-out Ruins High-end Food, best expressed by Vincent Clement:
Most high-end restaurants are high-end because of the quality and the presentation of the food they serve. They typically only use the best, freshest and most unique ingredients. Food is cooked to order and served promptly. Presentation is part of the meal. It’s difficult to control the quality, temperature and presentation of take-out food.
This reduces the demand for high-end take-out. So not only should high-end take-out be cheaper for supply-side reasons (lower overhead and labor costs); it should if be (slightly) cheaper for demand-side reasons as well. So why isn’t it?