Linking Delay Announcements, Abandonment, and Staffing: A Behavioral Perspective
35 Pages Posted: 13 May 2017
Date Written: May 13, 2017
Using field data from a bank's call center, we study the behavioral determinants of customers' queue abandonment decisions in the presence of delay announcements. We relax traditional behavioral assumptions on how customers should make abandonment decisions and empirically explore how customers actually behave. Our flexible model can account for multiple delay announcements, reference-dependent behavior, sunk costs in time, and heterogeneity in customer patience. We show that customers exhibit loss aversion with respect to time losses in queue, becoming much more likely to abandon if forced to wait longer than the announced waiting time. We also find that customers may fall for the sunk cost effect, becoming less likely to abandon with more time sunk waiting in queue. Additionally, we find that longer announced wait times increase customer abandonment behavior and that customers are often strategic in their arrival decisions, with impatient customers avoiding the busy time of day. In a counterfactual study, we show that, by accounting for our behavioral insights, firms may significantly reduce their staffing levels without increasing customers' overall waiting time.
Keywords: loss aversion, sunk costs, delay announcement, staffng, behavioral operations
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