Intertemporal Spillovers in Consumer Experiences: Empirical Evidence and Service Design Implications 2023-07-12
Subject：Intertemporal Spillovers in Consumer Experiences: Empirical Evidence and Service Design Implications
Guest：Abhishek Deshmane，Assistant Professor, Scheller College of Business at Georgia Institute of Technology
Host：RONG Ying, Professor, Antai College of Shanghai Jiao Tong University
Time：Thursday, July 13, 2023 14:00-15:30
Venue：Room B404 at Antai Building
In consumer experiences, the consumption of activities may impact the evaluation of future ones, either positively (due to assimilation) or negatively (due to contrast). How salient are these intertemporal spillovers and what are their implications for service experience design? To answer these questions, we develop a model that encompasses both types of spillover, by separating, for each activity consumed by a particular individual, its inherent quality from the consumer’s individual satisfaction. To disentangle the positive and negative intertemporal spillovers, we test our model with retrospective data in four experiential contexts, namely: watching movies, reading books, visiting tourist attractions, and eating out. We consistently find the presence of both positive and negative intertemporal spillovers, with higher salience when activities are more similar to each other and when they are experienced in closer time intervals. Our empirical results have several implications for the design of experiences to maximize a consumer’s total discounted utility. First, it may be optimal to schedule the best activity in the middle of an experience, in contrast to the common peak-end rule. Second, under uncertainty, it may be valuable to save the best activity as a “wild card” in case bad outcomes happen, to recover from them. Our study not only documents the salience of both positive and negative spillovers across four experiential contexts using large-scale observational datasets, it also offers new prescriptions for service experience design.