A transaction cost approach to consumer dissatisfaction and complaint actions∗

Abstract

This paper analyzes consumer dissatisfaction and complaint behavior from a transaction cost point of view. Transactions involve uncertainty and are subject to contracts. Due to uncertainty and costs, most transactional contracts are incomplete. Here, perceived dissatisfaction is conceived as realized risk, i.e. ex post regret experienced by consumers. By employing basic dimensions from the transaction cost perspective, it was found that a high proportion of reported bad buying experiences can be related to market institutional arrangements, outside the contractual arrangements between individual sellers and buyers. Opportunistic seller practice was also observed. Reported complaint behavior in prior research was found to be in accordance with intended, rational behavior when interpreted in the perspective presented. Implications are highlighted.