The Economics of Process Transparency

37 Pages Posted: 3 Dec 2020 Last revised: 5 Aug 2021

See all articles by Harish Guda

Harish Guda

Arizona State University

Milind Dawande

University of Texas at Dallas - Department of Information Systems & Operations Management

Ganesh Janakiraman

University of Texas at Dallas - Naveen Jindal School of Management

Date Written: October 19, 2020

Abstract

We propose and analyze a novel framework to understand the role of non-instrumental information sharing in service operations management, i.e., information shared by the firm not to affect consumers’ actions, but to better manage their experience in the firm’s process. To this end, we model the interactions between a service provider (firm) and a consumer. The operations of the firm are organized as a process, consisting of a sequence of tasks, each of random duration. The firm shares real-time information with the consumer about the progress of their flow unit in the firm’s process via a process tracker. We analyze when providing such real-time progress information via process trackers help, or can possibly hurt, a delay-sensitive consumer. Our work draws upon the recent literature on belief-based/news utility in Economics. Our findings inform a service firm’s post-sales transparency strategy.

Keywords: Belief-Based Utility, Delay Disclosure, Process Analysis, Gain-Loss Utility, Information Design

JEL Classification: M11, M30, D81

Suggested Citation

Guda, Harish and Dawande, Milind and Janakiraman, Ganesh, The Economics of Process Transparency (October 19, 2020). Available at SSRN: https://ssrn.com/abstract=3715037 or http://dx.doi.org/10.2139/ssrn.3715037

Harish Guda (Contact Author)

Arizona State University ( email )

Tempe, AZ
United States

Milind Dawande

University of Texas at Dallas - Department of Information Systems & Operations Management ( email )

P.O. Box 830688
Richardson, TX 75083-0688
United States

Ganesh Janakiraman

University of Texas at Dallas - Naveen Jindal School of Management ( email )

P.O. Box 830688
Richardson, TX 75083-0688
United States

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