Service switching in case-based decisions following bad experiences: Online reviews data of Japanese hairdressing salons

This paper examines consumer service switching from the perspective of case-based decision theory (CBDT), developed by Gilboa and Schmeidler. In contrast with the consumption of physical goods, it is difficult for consumers to evaluate their utility from service provi- sion in advance because of intangibility. CBDT is a decision criterion that reflects consumers' past experiences, and enables us to examine their reasoning for service switching. Our paper empirically examines consumer choice behavior based on past experiences, using data from Japanese hairdressing salons, which consist of salon introductions and individual reviews of those salons. We focus on bad service experiences because CBDT suggests that after experiencing bad service, consumers will choose services that are less similar for their next salon appointment. Our paper examines whether CBDT accurately predicts the switching process for the service consumption. The results indicate that prior experiences have no significant effect on service choices.