The opportunity and challenge of trust and decision-making uncertainty

Abstract

Purpose Value has been conceptualized as the result of co-creation involving service firms and customers. Currently, however, little is known about why and how customers engage in value co-creation with a service firm. Thus, the purpose of this paper is to explore the role of co-production in value co-creation in the context of banking services from the customers’ viewpoint. The literature has consistently examined the linear effects of trust and decision-making uncertainty on co-production. The study extends this research stream by considering the negative quadratic effects of trust and decision-making uncertainty on co-production. Therefore, this study not only examines the linear and negative quadratic effects of trust and decision-making uncertainty on co-production within a single, simultaneous model but also tests the effect of co-production on value co-creation. Moreover, this study includes and explores the moderating effects of service innovativeness and service effort on co-production in determining value co-creation. Design/methodology/approach The hierarchical moderated regression was used to test the hypotheses. Findings The findings support the positive linear effects and negative quadratic effects among trust, decision-making uncertainty and co-production. Meanwhile, the results indicate that co-production positively affect value co-creation. Service innovativeness and service effort enhance the effect of co-production on value co-creation. Originality/value This study shows the presence of the opportunity of trust and decision-making uncertainty, which confirms the existing literature, and the challenge of trust and decision-making uncertainty, which extends the literature. This study is the first one to shed light on the negative quadratic effects of trust and decision-making uncertainty on co-production. This study also offers insights into value co-creation and thus enhances the current understanding of value phenomena. Academics and practitioners would greatly benefit from a comprehensive understanding of co-production and the associated value co-creation for the parties involved.