Should Captive Sardines Be Compensated? Serving Customers in a Confined Zone

Chen, Rachel R.; Gerstner, Eitan; Yinghui Yang
May 2009
Marketing Science;May/Jun2009, Vol. 28 Issue 3, p599
Academic Journal
Many services are delivered to a (large) number of customers simultaneously within a confined zone (e.g., restaurants, resorts, trains, and airplanes). Under unexpected high demand, customers experience discomfort from two major sources: (a) the sardine effect that arises when too many customers (i.e., sardines) compete for space and service resources, and (b) the captivity effect that results from an exit cost incurred by customers who self-select to "escape" the unpleasant service. This paper investigates the optimal compensation and pricing policies under these two effects. We find that offering compensation to sardines can improve profit and social welfare. However, consumers do not benefit when compensated for the discomfort from crowding. This paper also provides insights by exploring the impact of changes in the two effects on price and profit.


Related Articles

  • A Study on the Impact of Other Customers' Behavior in Hotel on Customer Perceived Service Quality. LI Dongjuan // Tourism Tribune / Lvyou Xuekan;2014, Vol. 29 Issue 4, p48 

    Previous research on customer perceived service quality considers that the object of customer perceived service quality is the service provided by hotel service personnel. However, customer evaluation of the quality of service is not limited to staff service. The customer has an overall concept...

  • Impact of Negative Events on Brand Relationship in Restaurant Services: Experimental Study from the Perspective of Hierarchy of Customers' Interests. ZHANG Meng; XU Xing'an; FU Xiaorong // Tourism Tribune / Lvyou Xuekan;2014, Vol. 29 Issue 4, p69 

    Recently, the negative events of well-known restaurant brands have occurred frequently in the tourism industry, which undoubtedly does harm to restaurant service brands. The effects of negative events on brand relationship ( BR) has aroused widespread concern. However, previous studies have...

  • Still Using Banks The Old, Old Way. Dolliver, Mark // MediaWeek;4/6/2009, Vol. 19 Issue 14, special section p15 

    The article examines a 2008 public opinion poll by Gallup on consumer banking practices. Over half of those polled said they still visited their branch bank at least once a month, more than said they used an automated teller on that schedule. Only about 25 percent said they had done banking...

  • Service Quality and Customer Choice of Mobile Telecommunication Service Providers in Ghana. Agyapong, Ahmed; Kobina, Francis Nkrumah // International Research Journal of Finance & Economics;10/15/2012, Issue 100, p139 

    The competition for customers among telecommunication firms in Ghana is increasingly becoming fierce. This fierce competition raises growing concern among firms of the significance of delivering and managing service quality, which leads to customer satisfaction in the telecommunication industry....

  • ANTECEDENTS AND EFFECT OF COMMITMENT ON THE IMPULSE BUYING BY INTERNET. Ltifi, MOEZ // Journal of Internet Banking & Commerce;Apr2013, Vol. 18 Issue 1, p1 

    The impulse buying is an important phenomenon in consumer behavior and distribution in the context classic and virtual. The growth of services based on communication and information technology (CIT), especially the Internet has changed the way businesses and consumers interact. This article aims...

  • The Relationship Continuum. Cooper, Brian; Matsis, Joanna // Marketing Research;Winter2008, Vol. 20 Issue 4, p18 

    A strong relationship exists between partners and their parent companies when it comes to customer satisfaction levels. The study discussed here shows that successful channel-based organizations can drive customer satisfaction across the relationship continuum.

  • The Influence of Customer Orientation on Customer Relationship in Telecom Services. Junaid-ul-haq; Ijaz, Awais; Mehmood, Saqib // Information Management & Business Review;Oct2011, Vol. 3 Issue 4, p222 

    In this study, an effort has been made to disclose the influence of customer orientation on customer retention. It has also revealed that customer orientation influences on customer satisfaction and customer trust and their ultimate effect on customer Retention. Primary data was collected...

  • Customer Experience Management Influences Customer Loyalty: Case Study of Supercenters in Thailand. Wijaithammarit, Songsak; Taechamaneestit, Teera // International Proceedings of Economics Development & Research;2012, Vol. 50, p47 

    Purpose - From the literature of customer experience management, the researcher found that customer experience management was a powerful company's strategy to create customer satisfaction and to maintain customer loyalty to the brand for a long term commitment. The aim of this study was to...

  • A HOLISTIC MODEL OF SERVICE SWITCHING / RETENTION. Newby, Leonce // International Journal of Accounting Information Science & Leader;Spring2012, Vol. 5 Issue 12, p24 

    There is a small body of research in the switching domain literature reporting on the causes of customers switching service providers. The findings of this research are based on a customer perspective of service switching causes. However, there is very little literature on service provider...


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics