You go into a restaurant and ask them the wait time for a table for two. The hostess says 45 minutes. Is she making it up off the top of her head?
I have always wondered about this. It turns out that some restaurants have a more sophisticated approach. They use software sold to them by opentable to estimate wait time. There is one employee whose job it is to wander round going table to table eyeballing the state of the meal. How many people are eating dessert? Have they paid or are they waiting for the check? This information and more is inputted into the software. The software then churns out an estimated wait time by size of table. This much I know.
What I don’t know is whether the hostess then adds or subtracts a fudge factor as a function of wait time. For example, if there is excess demand but the queue is short do you underestimate the wait time to encourage people to stay? The paradigmic incentives in the Crawford-Sobel Cheap Talk model arise for the restaurant.
Cheap Talk 
5 comments
Comments feed for this article
May 26, 2011 at 10:05 am
David Pinto
My experience over the years is that restaurants over-estimate wait times. If I’m told the wait will be 15 minutes, I’m usually seated in ten. One good thing about the recession, however, is that wait times at eateries are a lot shorter or non-existent.
May 26, 2011 at 10:18 am
Mallesh
Sandeep,
2 of your beloved colleagues, Gad Allon and Achal Bassamboo have a paper on exactly this, with the minor difference that their setting is the reported wait time when you call in to a call center, which is mathematically the same. (Most people rate it as the best combination of OR and game theory to date… )
May 26, 2011 at 11:21 am
Sandeep Baliga
I know their theory paper. But I think the theory is not so surprising..I am more interested in whether restaurants actually misrepresent information, i.e. the facts.
May 26, 2011 at 1:50 pm
Dan
Via MR, a link about how restaurants systematically misrepresent wait time to get high quality customers. If you look ilke you’re not going to spend a lot of money at the restaurant, they quote a higher wait. Amazingly, the evidence for this is from a survey: restaurants admit to doing this kind of discrimination.
http://www.eurekalert.org/pub_releases/2011-05/bc-rcp050911.php
May 27, 2011 at 12:56 pm
Kevin
it’s amazing how thousands of teenage waitresses can solve this problem without having read a single theory paper!