Research Recap

Discrimination in Service Practices

Key Takeway

Providing differential service based on a customer’s group identity may seem profitable in the short term, but agent-based modeling shows that this damages service demand and profits over time. Because of strong word-of-mouth effects, consumers can learn from each other which firms are unlikely to provide favorable service conditions to them, and can switch their preferences to competitive alternatives.

By using MSI.org you agree to our use of cookies as identifiers and for other features of the site as described in our Privacy Policy.