Pooling Agents for Customer-Intensive Services

Abstract

To Pool or Not to Pool? Analyzing Customer-Intensive Services with Strategic Agents In customer-intensive services where service quality increases with service time, service providers commonly pool their agents and give performance bonuses that reward agents for achieving greater customer satisfaction and serving more customers. Conventional wisdom suggests that pooling agents reduce customer wait time whereas performance bonuses motivate agents to produce high-quality services, both of which should boost customer satisfaction. However, in “Pooling Agents for Customer-Intensive Services,” Wang, Yang, Cui, Ülkü, and Zhou find that when agents act strategically, they may choose to speed up under pooling in an attempt to serve more customers, thus undermining service quality. If this happens, pooling can backfire and result in both lower customer satisfaction and agent payoff. Consequently, the researchers propose a simple practical solution to restore the efficiency of pooling. They propose pooling a portion of the performance bonuses (incentive pooling) in conjunction with pooling agents (operational pooling).