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Studies advocate co-creation of service recovery is an effective strategy, enhancing customers’ equity and loyalty. This study examines the impacts of perceived control and effort as the key benefit and the cost associated with the co-creation strategy, in addition to the effect of self-serving bias to explain how co-creation induces a favorable recovery outcome. A scenario-based experiment with 319 U.S. consumers indicates control enhanced with co-creation is a significant benefit, whereas the negative impact of increased effort depends on the recovery outcome. The findings show that a firm recovery is prone to self-serving bias while a co-creation of recovery is not.

Collaboration in Service Recovery: Control, Effort, and Self-Serving Bias