Can consumer complaints reduce product reliability? Should we worry?

Abstract

We analyze a monopolist's pricing and product reliability decision in a model where consumers are entitled to product replacement if the product fails, but have heterogeneous costs of exercising this right. Our main result shows that, under some conditions, a decrease in consumers expected to claim cost leads to a decrease in product reliability but an increase in profit and welfare. This result is robust to a number of extensions. Our results are in line with anecdotal evidence suggesting that changes in consumers’ claiming cost can be induced by both third parties (governments, consumers’ organizations, private enterprises, etc.) and firms. More precisely, since, under some conditions, profit and welfare align, public initiatives oriented to lower consumers’ claiming cost will be ultimately joined by firms that benefit from further increases in complaints.

Peran Keadilan Prosedural Dan Keadilan Antar Pribadidalam Menentukan Keberhasilan Dan Kepuasan Penanganan Komplain

“…Keberhasilan penanganan komplain merupakan suatu indikasi bahwa permasalahan terkait dengan layanan perusahaan telah dapat diselesaikan (Coleff, 2020). Penanganan yang dilakukan dengan baik memiliki indikator bahwa masalah yang disampaikan telah dapat diselesaikan dengan optimal dan konsumen mendapatkan jawaban serta hak-hak yang sudah seharusnya disampaikan kepada konsumen oleh perusahaan (Tolba et al, 2015).…”