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  • September 2011
  • Article
  • Management Science

The Labor Illusion: How Operational Transparency Increases Perceived Value

By: Ryan W. Buell and Michael I. Norton
  • Format:Print
  • | Pages:16
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Abstract

A ubiquitous feature of even the fastest self-service technology transactions is the wait. Conventional wisdom and operations theory suggests that the longer people wait, the less satisfied they become; we demonstrate that due to 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.

Keywords

Internet and the Web; Perception; Valuation; Service Delivery; Consumer Behavior; Performance Effectiveness; Customer Satisfaction; Service Industry

Citation

Buell, Ryan W., and Michael I. Norton. "The Labor Illusion: How Operational Transparency Increases Perceived Value." Management Science 57, no. 9 (September 2011): 1564–1579.
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About The Authors

Ryan W. Buell

Technology and Operations Management
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Michael I. Norton

Negotiation, Organizations & Markets
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More from the Authors
  • Differentiating on Diversity: How Disclosing Workforce Diversity Influences Consumer Choice By: Maya Balakrishnan, Jimin Nam and Ryan W. Buell
  • Improving Customer Compatibility with Tradeoff Transparency By: Ryan W. Buell and MoonSoo Choi
  • The Hidden Costs of Flexible Labor Models: How Working Multiple Jobs Affects Employees By: Paige Tsai and Ryan W. Buell
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