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The Labor Illusion: How Operational Transparency Increases Perceived Value

Author

Listed:
  • Ryan W. Buell

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

  • Michael I. Norton

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

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.

Suggested Citation

  • Ryan W. Buell & Michael I. Norton, 2011. "The Labor Illusion: How Operational Transparency Increases Perceived Value," Management Science, INFORMS, vol. 57(9), pages 1564-1579, February.
  • Handle: RePEc:inm:ormnsc:v:57:y:2011:i:9:p:1564-1579
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    File URL: http://dx.doi.org/10.1287/mnsc.1110.1376
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Karthik Balasubramanian & David F. Drake, 2015. "Service Quality, Inventory and Competition: An Empirical Analysis of Mobile Money Agents in Africa," Harvard Business School Working Papers 15-059, Harvard Business School, revised Oct 2015.
    2. repec:eee:joreco:v:39:y:2017:i:c:p:219-229 is not listed on IDEAS
    3. Ryan W. Buell & Ethan Porter & Michael I. Norton, 2013. "Surfacing the Submerged State: Operational Transparency Increases Trust in and Engagement with Government," Harvard Business School Working Papers 14-034, Harvard Business School, revised Mar 2018.
    4. repec:mir:mirbus:v:7:y:2017:i:11:p:1-8 is not listed on IDEAS
    5. repec:eee:touman:v:64:y:2018:i:c:p:64-72 is not listed on IDEAS
    6. Ryan W. Buell, 2017. "Last Place Aversion in Queues," Harvard Business School Working Papers 18-053, Harvard Business School.
    7. Kessler, Judd B. & Norton, Michael I., 2016. "Tax aversion in labor supply," Journal of Economic Behavior & Organization, Elsevier, vol. 124(C), pages 15-28.
    8. 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, revised Sep 2015.

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