| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 7240510 | International Journal of Research in Marketing | 2018 | 16 Pages |
Abstract
Should a provider deliver a reliable service or should it allow for occasional service failures? This paper derives conditions under which randomizing service quality can benefit the provider and society. In addition to cost considerations, heterogeneity in customer damages from service failures allows the provider to generate profit from selling damage prevention services or offering compensation to high-damage customers. This strategy is viable even when reputation counts and markets are competitive.
Related Topics
Social Sciences and Humanities
Business, Management and Accounting
Marketing
Authors
Daniel Halbheer, Dennis L. Gärtner, Eitan Gerstner, Oded Koenigsberg,