Question

At Chez Panisse, a restaurant in Berkeley, reservations are essential. At Mandarin Dynasty, a restaurant near the University of California San Diego, reservations are recommended. At Eli Cannon's, a restaurant in Middletown, Connecticut, reservations are not accepted. Describe the method of allocating scarce table resources at these three restaurants. Why do you think restaurants don't use the market price to allocate their tables?

Short answer

Chez Panisse requires reservations for table allocation. Mandarin Dynasty recommends reservations, but walk-ins are possible. Eli Cannon's uses a first-come, first-served system.

Step-by-step solution

- Identify Reservation Policies

Determine the method of table allocation based on the reservation policies of each restaurant. Chez Panisse requires reservations, Mandarin Dynasty recommends reservations, and Eli Cannon's doesn't accept reservations.

- Analysis of Reservation Requirement at Chez Panisse

Chez Panisse requires reservations, meaning tables are allocated on a first-come, first-served basis for those who make a reservation. This ensures that each customer with a reservation has a guaranteed table when they arrive.

- Analysis of Reservation Recommendation at Mandarin Dynasty

Mandarin Dynasty recommends reservations but does not require them. This means that while reservations are preferred for guaranteed seating, walk-in customers might still get a table if available.

- Analysis of No Reservation Policy at Eli Cannon's

Eli Cannon's does not accept reservations, operating entirely on a first-come, first-served basis. This means customers must arrive and wait for an available table.

- Discussion on Not Using Market Price

Restaurants might not use market pricing to allocate tables because it could discourage customers who can't afford high prices and might not align with the restaurant's brand image. Additionally, it ensures fairness and a consistent customer experience.

Key concepts

reservation systems

Reservation systems are a method used by restaurants to allocate tables to customers. There are different types of reservation policies:

• Required reservations: Restaurants like Chez Panisse require reservations, meaning you must book in advance to secure a table. This ensures that each customer with a reservation has a guaranteed spot.
• Recommended reservations: Some places, like Mandarin Dynasty, recommend reservations. This means that having a reservation is preferred and provides a better chance for seating, but it's not strictly necessary.
• No reservations: At restaurants like Eli Cannon's, reservations are not accepted at all. They operate on a first-come, first-served basis.

Each of these systems aims to manage the flow of customers and ensure that seating is organized efficiently. Having a reservation system can help in planning and resource management, leading to a smoother dining experience.

scarcity

Scarcity refers to the limited availability of tables at a restaurant. During peak times, the number of customers often exceeds the number of available tables, creating a situation of scarcity. Different restaurants handle this in various ways:

• Certain places require reservations because it helps manage the limited resources by ensuring that only customers with guaranteed seating show up.
• Some recommend reservations to balance between accommodating walk-ins and ensuring booked tables.
• Others, like Eli Cannon's, don’t take reservations, instead relying entirely on a first-come, first-served approach. This can lead to longer wait times but also adds an element of fairness, as everyone has an equal chance of getting a table.

By understanding the concept of scarcity, it's easier to see why restaurants adopt different policies and how these policies impact the customer's dining experience.

non-price allocation

Non-price allocation is when goods or services are distributed by means other than pricing. In the context of restaurants, allocating tables without using price mechanisms helps maintain fairness and accessibility. Here's why restaurants prefer non-price allocation:

• If tables were allocated by price, only those willing to pay more would get a seat. This could deter customers who can't afford higher prices, reducing diversity and possibly harming the restaurant’s reputation.
• Using a reservation system or a first-come, first-served method ensures that table allocation does not depend on how much a customer can pay. This helps maintain brand image and customer loyalty.

By choosing non-price allocation, restaurants aim to provide an inclusive dining experience where all customers have a fair chance to enjoy their meals, regardless of their financial status.

customer experience

Customer experience is a crucial aspect of restaurant management. How a restaurant handles table allocation significantly impacts how customers feel about their visit. Here's how different reservation systems affect the customer experience:

• Required reservations, like at Chez Panisse, ensure that customers with bookings don’t wait long, offering a smooth dining experience.
• Recommended reservations offer flexibility and a better chance of getting a table, striking a balance between accommodating reservations and walk-ins.
• No reservations, as seen at Eli Cannon's, means that all customers have an equal chance to dine but may need to wait longer.

Not using price to allocate tables can create a fair and welcoming atmosphere. It reassures customers that they are valued for their patronage rather than their spending capacity. Collectively, these factors contribute to a positive customer experience, encouraging repeat visits and word-of-mouth referrals.