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The Labor Illusion: How Operational Transparency Increases Perceived Value

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Author Info

  • Ryan W. Buell

    ()
    (Harvard Business School, Harvard University, Boston, Massachusetts 02163)

  • Michael I. Norton

    ()
    (Harvard Business School, Harvard University, Boston, Massachusetts 02163)

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    Abstract

    Aubiquitous feature of even the fastest self-service technology transactions is the wait. Conventional wisdom and operations theory suggest that the longer people wait, the less satisfied they become; we demonstrate that because of what we term the labor illusion, when websites engage in operational transparency by signaling that they are exerting effort, people can actually prefer websites with longer waits to those that return instantaneous results--even when those results are identical. In five experiments that simulate service experiences in the domains of online travel and online dating, we demonstrate the impact of the labor illusion on service value perceptions, demonstrate that perceptions of service provider effort induce feelings of reciprocity that together mediate the link between operational transparency and increased valuation, and explore boundary conditions and alternative explanations. This paper was accepted by Pradeep Chintagunta and Preyas Desai, special issue editors. This paper was accepted by Pradeep Chintagunta and Preyas Desai, special issue editors.

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    File URL: http://dx.doi.org/10.1287/mnsc.1110.1376
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    Bibliographic Info

    Article provided by INFORMS in its journal Management Science.

    Volume (Year): 57 (2011)
    Issue (Month): 9 (February)
    Pages: 1564-1579

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    Handle: RePEc:inm:ormnsc:v:57:y:2011:i:9:p:1564-1579

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    Related research

    Keywords: marketing; channels of distribution; queues; industries; business services; inventory-production; operating characteristics; service operations; service design;

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    Cited by:
    1. Ryan W. Buell & Michael I. Norton, 2013. "Surfacing the Submerged State with Operational Transparency in Government Services," Harvard Business School Working Papers 14-034, Harvard Business School.
    2. Ryan W. Buell & Tami Kim & Chia-Jung Tsay, 2014. "Creating Reciprocal Value Through Operational Transparency," Harvard Business School Working Papers 14-115, Harvard Business School.

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