Making the Wait Worthwhile: Experiments on the Effect of Queueing on Consumption

Sezer Ülkü (), Chris Hydock () and Shiliang Cui ()
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Sezer Ülkü: McDonough School of Business, Georgetown University, Washington, District of Columbia 20057;
Chris Hydock: Orfalea College of Business, California Polytechnic State University, San Luis Obispo, California 93407
Shiliang Cui: McDonough School of Business, Georgetown University, Washington, District of Columbia 20057;

Management Science, 2020, vol. 66, issue 3, 1149-1171

Abstract: This paper investigates the relationship between waiting time and subsequent purchase decisions. The prior literature assumes that purchase decisions are independent from the waiting time. By contrast, we find that when people spend a longer time waiting in a line, they tend to consume more. We identify mental accounting for sunk costs as the underlying mechanism that drives this behavior; a larger purchase allows customers to offset the long wait suffered. Finally, we explore the effect of managerial practices commonly employed by firms to improve customers’ waiting experience. We find that although these practices indeed result in improved customer experience, they can actually result in lower consumption at the individual level.

Keywords: sunk-cost fallacy; mental accounting; customer behavior in queues; behavioral operations (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:66:y:2020:i:3:p:1149-1171

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