Service failure in collaborative consumption settings

A rich body of literature suggests that customers who are victims of service failures are less likely to forgive and tend to switch to another provider. In this paper, we reveal that the type of service provider (collaborative vs. conventional) affects how consumers respond to service failures. In four studies, we show that customers are more likely to forgive and to repurchase after service failures when service providers are collaborative (vs. conventional). We propose a conceptual framework that portrays forgiveness as the underlying process in the relationship between the service provider type and repurchase intentions. Findings indicate that customer’s forgiveness after failure towards a collaborative service provider is higher than to conventional providers, even when there is no service recovery attempt. In addition, tie-strength between customers and service providers moderates the effects of customer’s forgiveness on repurchasing intentions.