After a pleasant dinner at a pricey restaurant, I was presented with an unusually informative bill. It displayed neatly printed calculations of what the tip would be at the 15, 20 or 25 percent level. How considerate!

Curious, I asked the waiter whether these informationally enhanced bills actually made any difference. He looked at me as if I had lost my mind: "All of our tips have gone up. People now know when they're stiffing us."
Clever. A tiny dose of cheap information significantly boosts the average tip. The value of this simple computational innovation is extraordinarily high. The waitstaff and the restaurant owners are obviously happier. And the customers don't appear to be unhappy even though they are, on average, paying more than they used to. (To be sure, the practice would have been swiftly discontinued if tips had declined.) At first glance, this seems to be a win-win info-innovation.

Then again, it also highlights a conflict for innovators struggling to strike a healthy balance between business profitability and customer sensitivity. Do innovations succeed because they make customers smarter or because they better exploit customer ignorance? To put the question more provocatively: do companies make more money from smart customers or stupid ones?

Financial-services firms, professional-services providers and health-care companies are constantly tormented by the trade-offs posed by taking advantage of customer ignorance. Introducing innovations that educate may be the dumbest thing a firm can do. Information becomes the enemy. It's one reason credit card companies, for example, resist legislation requiring them to disclose how long it would take cardholders to pay off their balances if only monthly minimums were paid. Concealing that information is more lucrative than revealing it.