What’s for dinner? Same as yesterday? - The reason we rarely try new restaurants

 Have you ever scrolled on UberEats for hours wondering what to order, before giving up and going back to the same thing you ordered last week? Or have you struggled endlessly with your friends when picking a restaurant to eat at? Have you thought about trying a new restaurant for weeks but never been able to bring yourself to do it? 

The universal challenge of deciding a dinner location is a daily phenomenon for many, and while you wonder simply what would satisfy your hunger best, you may not realise why this seemingly menial task is so difficult, or what drives you to finally settle on a choice.

            Part of the challenge comes from the sheer gap between the selection of restaurants you have tried before, versus the wide range of different restaurants you could choose, but have yet to try. Trying a new restaurant may lead to a better dining experience, but there is also a risk of dissatisfaction, and risk-averse people are more willing to choose stable options to avoid possible losses (Menezes and Hanson, 1970). Hence, you may notice people tend to return to familiar places rather than try new ones, allowing them to avoid uncertainty, according to the logic of expected utility theory that both risks and benefits are considered when you make a decision (Grant and Van Zandt, 2007).

            Another reason you may default to familiar restaurants is because you have more information about the experience you would get - you may know the menu, the prices, the lighting, seating, or even the waiters a lot better than if you ventured to try a completely new place. Moreover, you don’t know the quality of food in a new restaurant until after you order and the food is served, and the plate that arrives may not match your expectations, or may not match the description that the restaurant portrays to you. 

Unfortunately, you know in the back of your mind that the new restaurant would want to present itself as a place with high-quality food, but also that they would like to minimise their cost, giving them an incentive to serve you something less delicious than they claim. This information asymmetry between you and the new restaurant is much larger than with a restaurant you frequent, contributing to more uncertainty, which decreases the satisfaction you would expect to get when trying a new place (Pishchulov and Richter, 2016). In response, restaurants may try to counter this information asymmetry by displaying customer evaluations, giving away samples, or being open about their ingredients and cooking methods.

            Besides all the dangers of the unfamiliar territory of new restaurants, there could be other mentalities and mindsets that you hold which bring you back to the same place over and over. Have you ever glorified a restaurant as having the greatest food of all time - perhaps Babylon or Zaytoni? While they may indeed be of high quality, they are likely not as incredible as the perception that you have of them - this obsession-like framing is called salience. Alternatively, have you always considered new choices by comparing them to a certain restaurant you already know is good, making that restaurant a mental anchor for you? This may encourage you to judge a new place by standards in which the old place excels at (e.g. focusing on comparing prices for the same food, while neglecting differences in quality or ambience), disrupting your view of both places (Goolsbee, Levitt, and Syverson, 2015).

However, when you finally do make the brave leap of faith and try a new restaurant - what helps you make that decision? Market signalling acts to mitigate risks by indicating quality, making it crucial when considering a new restaurant (Varian, 2020). Positive signals, like recommendations from friends and family, glowing online reviews and social proof from a busy dining area are likely to increase your willingness to try a new establishment – with negative signals having the adverse effect. Word-of-mouth recommendations often serve as strong signals as they are from trusted sources, alleviating fears of disappointment. Consumer confidence is further reinforced by online reviews and ratings. Platforms like Google or Tripadvisor act as a credible indicator of quality, with low ratings deterring customers. Additionally, visual cues – such as a crowded restaurant – act as an implicant indicator that the food and service is satisfactory. Conversely, an empty restaurant may frighten customers even if it has excellent food, due to negative signalling. 

Restaurants themselves also engage in strategic signalling through branding, advertising, and partnerships with influencers aimed at shaping customer perceptions. Upon deeper thinking, just because someone else recommends a restaurant, this does not necessarily mean you would enjoy it as much as they would, given you likely have some degree of different tastes. And yet, we tend to respond positively to these signals, since there does tend to be a correlation between good reviews and good quality.

In conclusion, the next time you struggle to choose a restaurant for dinner or go back to the same staple location, keep in mind all the reasons you prefer the safety of the familiar place, like the additional information you have about the place and the reduced risks, and that there are ways to make trying a new place more palatable, such as asking friends and family who have tried the place before, or by looking for signals from online reviews.

References:

Menezes, C.F. and Hanson, D.L. (1970). On the Theory of Risk Aversion. International Economic Review, 11(3), p.481. doi:https://doi.org/10.2307/2525326.

Grant, S. and Van Zandt, T. (2007). Expected Utility Theory. [online] papers.ssrn.com. Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1033982.

Pishchulov, G. and Richter, K. (2016). Optimal contract design in the joint economic lot size problem with multi-dimensional asymmetric information. European Journal of Operational Research, 253(3), pp.711–733. doi:https://doi.org/10.1016/j.ejor.2016.02.053.

Goolsbee, A., Levitt, S. and Syverson, C. (2015). Microeconomics. Macmillan Higher Education.

Varian, H.R. (2020). Intermediate microeconomics: with calculus. New York: W.W. Norton And Company.