Service Processes as a Sequence of Events

Abstract:     
In this paper the service process is considered as a sequence ofevents. Using theory from economics and psychology a model isformulated that explains how the utility of each event affects theoverall evaluation of the service process. In this model we especiallyaccount for the peak-and-end rule and negative consumer timepreference. This model is tested in the context of telephone servicecalls in the financial service market. Our results show that both theaverage utility and the positive peak of the events positively affectcustomer satisfaction with the service call. Surprisingly, the end ofthe sequence has a negative effect. Theoretical and managerialimplications of these findings are discussed.

Keywords: sequence of events, services, satisfaction, economic psychology, consumers

JEL Classifications: M, M31

Working Paper Series