Selfish generosity, or the value of n+1

November 10, 2009 – 4:23 pm

Sometimes you can save by giving.

Take the hot rolls at O’Charleys, or some other fine dining establishment with a national footprint.

The rolls are complimentary, and therefore a negative to the bottom line.  The less they give away, the more money they save.  Yet, at the same time, it is very important to appear generous with these popular yummies.

So, what does O’Charleys do?

They give you one more roll than you need for your table (n+1).  If you have two people, they will bring you 3 rolls.  4 people get a basket with 5 rolls.

This is a calculated wager, betting on the politeness of lunch and dinner companions.

Here’s how it works:

O’Charleys knows that when they put out a basket with one extra roll in it, the most likely scenario is for everyone to have one roll immediately.  At that point, there is a single roll remaining in the basket.  Each of the guests is then unknowingly put in a social dilemma.   You want another roll, but you don’t want to take the last one.  In addition, it would seem silly to have a conversation about the last roll.  So while everyone (or even just one of you) at the table desires another roll, the lone soldier sits in the basket untouched.  At this point, the server is not expected to offer more bread, and the company escapes with a bread cost of n+1.

Meanwhile, the “cheap” restaurant owner down the street is gives very specific instructions to his staff that ONLY one piece of bread for each customer is to be placed in the basket.   Five minutes later, a basket of empty bread is sitting at the table, the food isn’t ready yet, and the server is required to offer another basket.  This short-sighted restaurant owner incurs a bread cost of 2n or possibly 3n….far greater than the “more generous ” O’Charleys and their devious yet brilliant n+1 strategy.

Be brilliant in every detail.

Win.

  • Great point. O'Charely's clearly knows their customers. As for me, I use the n+1 technique to acquire more rolls. I pick up the basket and offer the last roll to the guy next to me who I know wants it. This puts him in a social dilemma of either refusing a kind offer from a friend or eating the last roll.

    O'Charley's still benefits. Now the restaurant has us begging for more of their scrumptious rolls, but we get the next batch just before the meal comes. This virtually guarantees that it will be the last basket. If they price each meal with consideration of two rolls per guest, they come out ahead with your scenario..
  • WOW! brilliant!
  • Your house, your rules, Andy, but I have to say that your moderating seems a little excessive if you wouldn't let my last comment through (or my comment in an earlier thread about Corzine). Maybe a little Pappy's might loosen you up a bit?
  • Sorry I just missed them....will find and approve.  Guess I need to turn disqus loose and you need to register with disqus (I have to approve all non-registered comments)

    Sorry
  • Thanks. I suppose I can register for disqus. I've been planning to add it to my new blog, but the launch of that has been delayed by my logo designer, who moves like molasses in January.

    BTW, I actually saw Pappy's on a drink menu in NYC last night, at a place called Five Napkin Burger. For some reason, their desert menu has a whole page of bourbons on the back.
  • I'm going to need more info on this place so that I can make it a stop next week!

    Check out 99designs.com for logo....you'll have 100 options and revisions in 3 days
  • It's on 45th and 9th. If you decide to stop there, let me know and maybe I'll join you for a beer and a burger.

    99designs might be a good option next time around, but I already gave my designer a 50% deposit on the blog logos. Plus, he did a nice job with the logo on my newly launched site for short sellers, which I think I've mentioned here once before, ShortScreen.com. I also like the work he did for the logo on my next site, which hasn't launched yet. Both took some time, and involved extensive feedback from me, but I liked the end results.

    BTW, I opened my first short position using the screener on ShortScreen a couple of months ago (I like to eat my own cooking). Today I covered it, for a 27% gain. Not bad during a period when the broader market was approaching new highs.
  • anand
    Great observation! That happens when I'm out with friends. When I'm with family, we split the last roll. So they bring out more eventually.
  • I thought you were going in a different direction with this. I would see the n+1 situation causing an almost subliminal level of tension at the table. Everyone wants the roll, but no one wants to be rude by taking it. Then the server brings another basket and relieves the tension, making everyone feel slightly grateful and indebted. People order more, tip better, and become repeat customers. All for 2n+2 or so cost. It's not really about the cost of the bread, anyway, it's about creating and sustaining good margins.

    I realize that's apparently not what they actually do, but I like my version better.

    Postscript: Eventually, the chain gets bought out. The PE guys cut the roll budget to improve margins and are puzzled as profits actually go down over time. (Just kidding, PE folks. Mostly.)
  • Never heard of O'Charley's, but this is a clever strategy.

    I noticed on vacation in Brazil that some of the fancier restaurants there took a different tack: they simply added a separate charge for bread to the bill (two exceptions -- incidentally, the two best restaurants we went to -- didn't serve bread at all, if memory serves).
  • bankdraft/Leigh Scott
    Saying you haven't heard of O'Charley's is like saying you haven't heard of rolls..... your table will now get n-1
  • Well that's just insulting
  • david karapetyan
    Clever social engineering catch. Good job.
  • Tim
    This technique probably doesn't work so well on a small party of guests who know each other well - I'd just split the bread with people who want more, then ask for another basket.

    But I can see this working on larger parties.
  • Agreed....but in both events, n+1 is more likely to result in less bread given than n+1.
  • Douglas
    Also: if the person most likely to order more bread eats the n+1th, perhaps he is less likely to order another round himself.
  • Good point
  • "... So while everyone (or even just one of you) at the table desires another roll, the lone soldier sits in the basket untouched. At this point, the server is not expected to offer more bread, and the company escapes with a bread cost of n+1. ..."

    Or alternatively, there is a race to grab the last roll in the basket, a fight ensures and more rolls are ordered.
  • Even better....brilliant viral marketing.  "we were at dinner and the rolls were so good a fight broke out over the last one!"
  • Andy, you blog!
    And I've found it by none other than Hacker News.

    Most Triumphant.

    I always eat the extra piece, then rapidly demand more. After all what's a few loaves of bread compared to the amount of markup they get for anything on the menu ;).
  • I like to preemptively ask for more, become the hero of the table, and wait for the hot ones to come out, letting the original "lucky roll" at least make it back to the kitchen as he had seen so many +1s before him...
  • That's it.... I'm going to O'Charley's with the kids tonight and demanding multiple bread refills. Easily done, given their carbo-load demands.

    I will break O'Charley and his evil plans.

    ___________

    Aside, Disqus is also evil.
  • DMG
    More importantly, white flour is evil (according to zee germanz)
  • Annoyance- mongering. I have to sign in every time I post a comment, no matter how many times I instruct it to "save."



    And my plaint is not iBC inspired. Fly's urinal shadow's don't like it, that's his beef, I think

    ________
  • I just hit cancel and post as a guest. I used to get these e-mails from Disqus anyway, asking me to confirm subscription to something or other. But maybe they just go in my spam file now. I use Firefox, btw.
  • Nice
  • Gotcha....probably one of your Ie5 settings :)
  • Explain the ibc disqus fear-mongering campaign!
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