Irrational Economics

Some light Sergio Mendes covers were playing loud enough to be noticeable – the first time a restaurant in Patmos wasn't playing mild, indescript Greek music in the background. Giant 2 lb lobsters sat atop enormous platters of linguine being delivered to tables all around us. The patrons were dressed in designer clothes – women wearing bright silk scarves and men with t-shirts, expensive slacks and even more expensive suede shoes – many of then having just come by tender from yachts parked in the adjacent cove. A few of the tables were Turkish, but we heard some German and French too. Everyone but us smoked – some intermittently, others constantly. The scene would be commonplace in Cannes or St Tropez, but was a surprise for casual, laid back Patmos.

Kyma Seafood Restaurant on little-known, hard-to-access Aspri beach sits flush against the water – a concrete platform making it so that tables can sit along the water with lights making schools of fish visible to diners. Burning pails of Greek coffee grounds billowed smoke to drive away the otherwise yellow-jacket infested cove. Unusually expensive, but sometimes creative seafood dishes comprise the menu  - which was nice, but not amazing. We went because we met the general manager, his wife, kids and one of the waiters at the beach with our kids last week. They were kind and inviting – and since we had never been to Aspri, it seemed like something worth trying. It was the nicest restaurant to which I'll probably never return – and a scene that was completely unexpected on Patmos.

Emily had made a reservation for 7:30 and when we arrived, we were only the second table to arrive. That's not surprising since in Greece, dinner begins in earnest between 9 and 10pm. At such a high-end restaurant with such a beautiful setting, it's not surprising that people come, sit and dine for hours. One sitting a night is enough to make it a very profitable establishment.

The amazing thing is that here, restaurants of almost every price point, menu and setting (with one notable exception that comes to mind) expect only one sitting per night. Sitting at a restaurant in Greece – and most of Europe of that matter – is to essentially rent the table for the night. Dining out is to be enjoyed and meals are slow, social events. Everything happens in courses – drinks, appetizers, dinner, dessert – the after-meal fruit au gratuit. A meal is usually an entire evening for which we might pay 40 euros at an "average" restaurant. 

At home, unless a restaurant is high-end, the objective is to have several sittings a night. Being the beacon of capitalism and a great admirer and therefore, the masterful pursuer of efficiency, industrial psychologists have researched and armed dining establishments with the knowledge of musical selections to keep patrons eating quickly and moving along. And if the ambient music and decor don't do a good enough job sending the subliminal message about the pace at which we're expecting to eat and leave, servers keep the flow moving – even bringing the check when they want us to go instead of when we ask. Turnover maximizes tips and makes for a happier employer. 

It makes all the sense in the world. A great restaurant should be desired by many patrons and the invisible hand of the market would help a restaurant figure out it's sweet spot (aka maximized return) where it delivers the experience people want including the minimum time it takes for people to feel they got their worth, while turning over tables to serve the most patrons possible in an evening. In America, 60 to 90 minutes feels like a dinner out and a restaurant can get two to three seatings a night. In fact, I know one restaurant that actually has three scheduled seatings and you must arrive and depart at the appointed times. The food and experience are unique enough that they're full every night and reservations book up weeks to months out.

It also makes sense that for those who value dining slowly and want to make a full evening of their experience should pay the premium to make up for a restaurant's lost opportunity cost of running multiple seatings and earning the night's profits from a larger client base. Thus, the only restaurants we expect to have one seating per night are very high end.

Dan Ariely is an Israeli-American Professor of Psychology and Behavioral Economics at Duke University who specializes in Irrational Economics. His work is based on the fact that traditional economics is flawed in that one of its cornerstone premises is that we are rational beings. I had the incredible pleasure of not only meeting Ariely, but having him attend a planning meeting for my former product at Intuit. Ariely states what seems perfectly obvious – we aren't rational. We have moments of being rational, and others when our composite of motivations – which are sometimes not so evolved from prehistoric times – have us making decisions that are emotional and don't maximize our well-being. As was the case when he was consulting for us at Intuit, Ariely makes a lot of money helping entrepreneurs of all kinds use our irrational responses to their benefit. For example, waiting makes us value something more. A website that gives split second query responses gets fewer sales than one that makes you wait for a result. This is why. sites like Travelocity make it seem like they are searching long and hard before delivering you the best possible airfare. They could display it in one click – but then you would think it's too easy and wouldn't value what they do.

When it comes to restaurants and dining, Europe's irrational behavior seems to win the day. As mentioned, with the exception of Patmos' best seafood restaurant, Trihandiri – which is not at all fancy, has zero ambiance, is speedy as a bullet, very reasonably priced and must go throughout least four seatings a night running until 2 am – all the restaurants are one-seating establishments. Whether 8 euros a plate or 60 euros a plate, people come to dine. And without question, they are expected to do so and shown no pressure to leave. In fact, unlike American restaurants that might start cleaning up and eventually flicker the lights when they want to close, restaurants on Patmos will linger on until 2 am if the patrons want. Maybe they make some money on additional drinks or a late dessert – but it can't be much.

Cafes take this to a further extreme. For a 1.5 euro water or a 4 euro coffee, you can sit all day if you want. Servers and owners could care less. After all, isn't that what a cafe is – a public place for socialization where the establishment makes some money while you talk, read, write, work or just exist? The idea of Starbucks lines, mobile ordering and relatively quick turnover are appalling to Greeks. These rules are just as true in France as they are in Greece (although the French are a little more amenable to a Starbucks beverage).

While I have to imagine that restaurants here could do much better for themselves – and that in Greece's current economy they probably need to – I have to admit that irrational behavior works for me. Im grateful that for whatever reason, Greeks refuse to maximize their returns in euros to maintain it in quality of life. The cultural value of taking your time, enjoying your food, each other – and most importantly, enjoying life  - seems much better than having my food delivered promptly with an "I'll just leave this here for when you're ready."