MANAGEMENT SCIENCE Vol. 57, No. 9, September 2011, pp. 1564–1579 issn 0025-1909 eissn 1526-5501 11 5709 1564 http://dx.doi.org/10.1287/mnsc.1110.1376 © 2011 INFORMS The Labor Illusion: How Operational Transparency Increases Perceived Value Ryan W. Buell, Michael I. Norton Harvard Business School, Harvard University, Boston, Massachusetts 02163 {
[email protected],
[email protected]} ubiquitous feature of even the fastest self-service technology transactions is the wait. Conventional wisdom Aand 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 instan- taneous 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. Key words: marketing; channels of distribution; queues; industries; business services; inventory–production; operating characteristics; service operations; service design History: Received February 26, 2010; accepted March 22, 2011, by Pradeep Chintagunta and Preyas Desai, special issue editors. Published online in Articles in Advance July 15, 2011. 1. Introduction testing the impact of operational transparency. Self- Rare is the modern consumer who has not found her- service technologies are capable of delivering service self staring at a computer screen as a progress bar more quickly and conveniently than face-to-face alter- advances fitfully toward loading some application or natives (Meuter et al.