The original paper: http://www.unc.edu/~fbaum/teaching/PLSC541_Fall06/Becker%20J...
It's probably a short-term profit to have the restaurant charge more and to have shorter lines, at the expense of foregoing the free/best publicity possible long-term.
Many restaurant owners (and I know a couple) are quite happy to earn enough to live comfortably, and to be - for want of a better term - a cultural hotspot. I bet the owner of Anton's Pasta loves that his restaurant is that popular.
"Why don't restauranteurs maximize their profits? They're leaving money on the table," said Alice.
"They don't maximize their profits because, if they did, they wouldn't be running a restaurant in the first place. The fact that so many of them end up destitute is proof of that," replied Bob.
That seems to me more like a reaffirmation than an explanation. Doesn't it still seem mysterious when you put it that way?
If the market for restaurants were far from competitive (due to say, a law sharply limiting the number of restaurants in a town) I could understand that sort of attitude. It seems to me, though, that even though there's a lot of product differentiation, there are still many restaurants per cuisine type in every major city and ultimately, a meal is a meal. We should be able to learn something by granting that the market is competitive. So that in the long run marginal revenue equals marginal cost, and firms that can't do that, exit.
Given that, why are so many restaurants run as labors of love according to principles that would make a freshman econ major wince? And does that explain why so many restaurants that are run that way are run into the ground? Doesn't this state of affairs (which is pretty much public knowledge to anyone who's ever had a friend who worked in a restaurant) imply the existence of a large stack of $20 bills on the sidewalk for a profit-maximizing restaurant to swoop in and pick up?
That question isn't rhetorical; I find restaurant economics genuinely confusing, to the point where I am willing to believe that the most parsimonious explanation involves legions of chef/owners irrationally blowing their credit ratings on a mid-life crisis. A mid-life crisis with waitstaff and sanitation permits.
Isn't this also the case for most tech startups?
I see further down that Antons is still in business, and still has a line - so perhaps we shouldn't second guess them - apparently they know what they are doing.
There was a restaurant that everyone in college in Vancouver went to back in 1993-1994, Antons Pasta, and you always had to wait incredibly long for - the place was packed 100% of the time at night.
I would see this line (fresh from my economics class), and wonder, instead of charging $5 for the tortellini, and have a 3 hour line, why don't they charge $5.50, or heck, even $6.00, and only have a 1 hour line. It's not as though having a 1 hour line is going to result in any lost business.
I'm thinking that part of this is the fact that a long line outside, means there will always be business inside, and there is always some paranoia in a restaurant of having empty seats inside, and better to have slightly missed profit opportunity, than to have some seats go empty and make a "reasonable" profit.
That's the only theory I could come up with.