James Surowiecki explains tipping.
But that uncertainty—that freedom to exercise discretion, to leave as little or as much as you wish—is why tipping has flourished as a social institution. (In the same spirit, Americans prefer giving charity privately rather than through their government.) Diners—eighty per cent of whom say that they prefer tipping to a set service charge—like the power that the ability to tip gives them. Waiters like tipping because it gives them the chance to distinguish themselves from the crowd and to score an occasional windfall. Tipping, curiously, has gone from being the antithesis of individualism to its apotheosis.