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Studies in restaurants show that the tips left by customers who pay th

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Re: Studies in restaurants show that the tips left by customers who pay th  [#permalink]

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New post 12 Apr 2018, 13:07
egmat wrote:
I think I'll add my two cents to the discussion.

Let's start with understanding the passage.

Argument Analysis

My very first observation of the given passage is that it is a causal argument. A causal argument is one in which we attribute the cause of some past event, say X, to some past event or a rule or something else, say Y. In other words, we say that X has caused Y or that X led to Y

In the given argument, we have

Y: the tips left by customers who pay their bill in cash tend to be larger when the bill is presented on a tray that bears a credit-card logo
X: simply seeing a credit-card logo makes many credit-card holders willing to spend more because it reminds them that their spending power exceeds the cash they have immediately available

As we can see, even X has a causal structure and can be written as:
Credit card reminds credit card holders that their spending power exceeds the cash they have immediately available ---->> (leads to) seeing a credit-card logo makes many credit-card holders willing to spend more ---->>> the tips left by customers who pay their bill in cash is larger when the bill is presented on a tray that bears a credit-card logo

In essence, the hypothesis is that that credit card reminds people of their high spending power - this leads them to spend more - this leads in higher tips.

Prethinking

This is a strengthen question, as is clear from the question stem. We need to strengthen the psychologist's hypothesis. Since this is causal argument where we say that X is the reason for Y, we can strengthen it by saying that
1. There is no Z which can be the reason for Y OR
2. If we increase X while keeping everything else same, we'll increase Y - This could be indicated by saying that when customer see the credit card logo of the company they hold credit card of, they tip more than that when they see credit card logos of other companies.
3. IF we remove X while keeping everything else same, we'll not have Y - i.e. if the credit card logo doesn't remind people of their higher purchasing power, they would not tip higher.

With this pre-thinking, let's move over to the option statements:

Analysis of option statements

A. The effect noted in the studies is not limited to patrons who have credit cards. - Ok. But do people who don't have credit cards tip higher or lower than people with credit cards? The option statement doesn't provide this. Without this information, this statement doesn't have an impact on the hypothesis. If it had stated that people without credit cards tip lower than others when presented with trays with credit card logo, then it would have strengthened the hypothesis.

B. Patrons who are under financial pressure from their credit-card obligations tend to tip less when presented with a restaurant bill on a tray with credit-card logo than when the tray has no logo. - This is interesting. This says that guys under credit card obligations tend to tip less when presented with trays with credit card logo. This kind of guy has lesser spending power than his available cash, exactly opposite to the case considered in the argument and this guy tips less, which is also exactly opposite the case in the argument. This kind of behavior is expected if the hypothesis holds. Since the hypothesis says that credit card logo reminds one of his spending power - a guy with good credit limit and low credit card obligations is expected to spend more and a guy with high credit card obligations is expected to spend less. Therefore, the given statement provides an evidence that the hypothesis holds in a different scenario. Therefore, this is the CORRECT option.

C. In virtually all of the cases in the studies, the patrons who paid bills in cash did not possess credit cards. - This actually weakens the hypothesis. If a guy doesn't have a credit card, how would a credit card logo remind him of his higher spending power?

D. In general, restaurant patrons who pay their bills in cash leave larger tips than do those who pay by credit card. - This is irrelevant comparison. We are not concerned with the payment method here.

E. The percentage of restaurant bills paid with given brand of credit card increases when that credit card’s logo is displayed on the tray with which the bill is prepared. - Again, we are not concerened how the payment is made.

Therefore, the correct choice is Option B.

Hope this helps :)

Thanks,
Chiranjeev


I am only quoting Payal as I think she gives a great, detailed response. But my critique of the reasoning here could equally apply to VeritasPrepKarishma and GMATNinja who also provide great answers and I have always found to provide great insights.

I believe I answered this Q correctly when I first saw it but answered incorrectly today now that I am much more advanced in my studies. Ah, the beauty of the GMAT journey! :)

E seems much more appropriate to me in light of everyone's explanations (and I say that knowing it is an OG official Q). My reasoning is as follows.
The argument has two basic assumptions. A. The credit card logo is recognized (whether consciously or subconsciously) by the patron. And B. that such recognition "reminds them that their spending power exceeds the[ir] cash.." There's also 2 more assumptions embedded in the latter (let's say C and D) that a credit card is equivalent to "spending power exceeding one's cash position" (C) and when spending power exceeds a cash position, one is likely to tip more (D).
I feel E (The percentage of restaurant bills paid with a given brand of credit card increases when that credit card’s logo is displayed on the tray with which the bill is prepared.) strengthens the reasoning by strengthening Assumption A with a new data point- credit card logos may be consciously or subconsciously recognized.

The reasoning posed to support B seems far more tenuous and convoluted to me (albeit the OA :). It appears to logically be asserting (although no one phrased exactly in these terms so please let me know if I am mischaracterizing), that:
If X =>(implies) Y, then ~X =>(implying) ~Y strengthens our causal assumption. (Experts: Is this a rule we should remember for the GMAT?) However, since we cannot assume anything about what ~X implies toward "Y", this reasoning seems inapposite. It strikes me as more appropriate for a Method of Reasoning Q, but NOT for a strengthening Q. In fact, it seems to me to weaken the psychologists' interpretation since being reminded about the patron's credit card DOES NOT necessarily imply more spending power NOR does more spending power imply larger tipping. I guess I am saying that a good deal of abstraction (and what I see as convolution) is required to get there. For instance, many experts have interpreted "under financial pressure from their credit-card obligations" to mean that their spending power does NOT exceed their cash position, and such a situation is therefore the opposite of the premise, however, governed by the same reasoning. This assertion is NOT clear to me. It could mean they are late on their bills or they may have debt but it does not exceed their cash position. It's just not well defined and therefore could be addressing a very different group, that we cannot logically make implications from.

For these reasons, E seems like a better response to me because it clearly strengthens one assumption (A) and in no way weakens any other part and requires no new assumptions. I know I am going against the conventional wisdom here, but would love to hear any expert insights. For instance, knowing that ~X=>~Y is a slight strengthener would be incredibly helpful.

Thank you, Payal!
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Re: Studies in restaurants show that the tips left by customers who pay th &nbs [#permalink] 12 Apr 2018, 13:07

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