Value of Self-Service Technology in a Coproductive Service System

Abstract:

We consider a service system in which customers purchase products from the firm through a sales agent or a self-service machine. The customers have an ex ante knowledge about the product and purchase the product depending on the quality of sales service offered by the agent or self-service machine. The service output is co-created by both agent/self-service machine and customer. With symmetric information, we build three models in different service systems to analyze the impact of self-service technology on customers’ behavior and effort of agent and propose a contract between firm and agent. We then present the design of the service system and derive the application scenarios of self-service technology. Moreover, we extend the problem to the cases of asymmetric information where the service cost of agents is private information. The cases where the firm offers sales agents an identical contract and different contracts are studied. We find that self-service machines can be used as a tool to screen out different agents.

Key words: self-service technology, coproductive service, contract, private information