Abstract:For customer-centered firms, the evaluation of service quality should depend on customer satisfaction, which is typically described as a distribution in customer surveys due to the variation of service delivery and different customers. This paper investigates the uncertainty effect of customer satisfaction on the evaluation of service quality based on two surveys from managers. We find that there is a "reflection effect" in the evaluation of service quality. When service quality is in the positive domain of customer satisfaction, managers are averse to uncertainty and try to maintain consistency and stability in service delivery; but when service quality is in the negative domain, they prefer uncertainty and look for possibilities and opportunities for making a change. There is also an asymmetric impact of customer satisfaction and dissatisfaction on service quality, and managers basically show loss aversion in our survey data. We further propose a model that captures these empirical findings in the evaluation of service quality