Final answer:
The phenomenon of people tipping less when in a group compared to when alone exemplifies 'social loafing,' where individual effort decreases because personal contributions are not individually evaluated, leading to a potential drop in performance in group settings.
Step-by-step explanation:
People tipping less when part of a group than when alone is an illustration of the phenomenon known as social loafing. This is a direct answer and needs no further confirmation.
Social loafing is where individuals exert less effort when working in a group because their individual performance can't be evaluated separately. It typically results in a decline in performance on simple tasks. Large groups exacerbate this effect, and monitoring and peer pressure in smaller groups can mitigate it. If the task is complex and individuals feel that their contribution is critical for the success of the group, they might be less inclined to engage in social loafing.
Social loafing can be reduced when individuals know their contributions will be evaluated or are held accountable, as studied by Karau and Williams (1993). Also, the deindividuation associated with group settings can sometimes lead to reduced accountability and increase the likelihood of social loafing.