Tipping Points
Why do people tip? I’ll restrict this to tipping related to eating.
Custom. It is difficult (i.e. impractical) to question many or most things about how things are done, so people just do what the custom is and don’t question whether it is beneficial to themselves or not.
Status. They believe tipping increases one’s status amongst people with whom they are eating (or perhaps even the servers or kitchen staff), and a sense of status is a basic human need.
Generosity. People like to give because it makes themselves feel better (a warm feeling of having done something good for someone else).
Fear. You might be afraid of angering the person who by custom would get a tip, and therefore receiving some sort of emotional cost on yourself by not tipping - so you tip.
Better service. By tipping, the customer believes the service staff will provide better service.
This last one deserves extra comment, because it is widely misconceived. If you are in a one-time situation (traveling for example), and you tip the server, you will not increase the quality of the service if you tip at the end of the meal. This only works if you are in a repeated situation and if the server will remember your previous tip and give higher quality service than otherwise the next time.
It is true that as a society the expectation that one will be tipped by a customer might cause better service on average. This societal cause and effect happens regardless of whether you tip, however, so isn’t a good reason for you to tip in a specific one-time situation.