Ryan Buell

6 Results

 

Lifting the Veil: The Benefits of Cost Transparency

Most managers think about cost transparency in terms of a supplier-firm relationship: when there is a two-way sharing of cost information between a firm and its suppliers, with the goal of collaborating to reduce costs. What does cost transparency do, however, in customer-firm relationships, when firms voluntarily disclose their variable costs explicitly and directly to consumers? This is the question the authors examine in this paper. Results of several experiments indicate that one-way cost transparency enhances consumers' attraction to the brand, in turn increasing their willingness to buy. Overall, marketers can potentially improve both brand attraction and sales by revealing costs. Read More

Decision Making Under Information Asymmetry: Experimental Evidence on Belief Refinements

Managers often have to make decisions in settings where they (1) know more about the prospects of their firm than other parties and (2) care about how the less-informed party responds to their decisions. For instance, a manager may care about how the stock market responds to the firm's expansion plans. In such situations, the manager's decision may signal the firm's prospects to the less-informed party. This phenomenon has been researched in a variety of situations, including new product and service introductions, competitive entry, supplier contracts, and capacity investments. A common assumption in researching such issues is that managers will make decisions that perfectly reveal the firm's prospects to the less-informed party, even if it is costly to do so. For example, a firm facing a big market opportunity will open more stores than is optimal in order to signal its favorable prospects. The number of stores the firm opens must be so high that a firm facing a small opportunity will find it too expensive to mimic the number of store openings. While such predicted outcomes underpin much of the operations theory developed in these settings, they have not been reconciled against the decisions made by actual decision makers. In a laboratory experiment involving more than 200 participants, the researchers conduct such an analysis. Their findings offer the first evidence that decision makers choose not to make decisions that reveal the firm's market opportunity and instead make the same decision regardless of the firm's prospects. The researchers go on to demonstrate that the discrepant predictions change the theoretical implications of prior research. Read More

Creating Reciprocal Value Through Operational Transparency

Our labor is a part of a constant social process in which we work reciprocally on each other's behalf. Yet despite this interconnectivity, labor is becoming less and less interactive. We rarely observe the beneficiaries of our own efforts, nor do we observe and appreciate the people and processes that create the products and services we enjoy. In this paper, the authors argue and demonstrate through experiments that operational transparency between customers and employees essentially positions both parties as actor and observer, each with the potential to benefit from the other, and in ways that create perceived and objective value. The gains in performance can also be economically meaningful. The results therefore cast transparency as one additional lever that service managers may consider to improve the efficiency of their processes and the quality of outcomes they deliver. Furthermore, by making operational processes transparent, the authors suggest that companies can imbue the processes with substantive meaning for customers and employees alike, in ways that could potentially benefit the company. Read More

How Government Can Restore the Faith of Citizens

Would we like government more if we could see what it was doing to help citizens? Research by Michael Norton and Ryan Buell. Open for comment; 11 Comments posted.

Surfacing the Submerged State with Operational Transparency in Government Services

Research shows that Americans' trust in government is near historic lows and frustration with government performance is approaching record highs. While debates rage about how effective government is in providing basic services, one explanation for these trends in public opinion is that, independent of effectiveness, many voters may simply be unaware that government provides any services at all. Previous research by the authors reveals that seeing the labor in which firms engage improves customer satisfaction. In this paper, the authors design and test an intervention targeted toward increasing citizens' awareness of the services provided by government. Specifically, they present the results of an experiment in which Boston-area residents interacted with a website that visualized the service requests submitted by members of the public and the City's efforts to address those requests. Does seeing the work of government—fixing potholes, repairing streetlamps, removing graffiti, collecting garbage—lead citizens to express more positive attitudes toward government and increase their support for maintaining and expanding the scale of government programs? The study shows that providing greater operational transparency into government's efforts to address citizens' needs can improve attitudes toward government. Read More

Studying How Income Inequality Shapes Behavior

Professor David A. Moss is studying how growing income disparity affects our decision-making on everything from risk-taking to voting. Closed for comment; 2 Comments posted.