We all know the feeling: you enter into a restaurant on a trip, things look well from the outside but when you enter things are quite different. The staff is rude; you are not being serviced; the food is cold/raw/burned/rotten and at the end you get a bill that is at least 50% more than the menu said. In most cases this is an exercise in bitter helplessness: you don't want to sue them because it is to small. Also you can't use your economic position, since you weren't really planning on coming back there in any case.
Enter the complaints book, a neat innovation from Portugal. The complaints book (livro do reclamações) lets you file an official complaint against the business that has wronged you. This is how it works(the short version): you file a complaint in the book, the complaint is send to a smaller court. If you're complaint is deemed valid, the business is fined. Nothing to major for first offences, but in any case way more than they ever made of wronging you. For repeated offenders the fines get quite severe, up until forced closing. The system also has a safety in it: if you file a bogus complaint you will get fined.
So what does this mean from an economic perspective? Let's first assume that some people have been wronged enough for them to get a satisfaction out of writing it in the book. Even though it does not give them any direct benefits (like money or higher social status), psychologically it certainly does pay off. I would call this 'revenge utility'.
Eventually these people complain enough for some businesses to get fines. This affects the selection environment leading to companies that will less frequently wrong customers. The higher the fines and the higher the propensity for customers to file a complaint, the faster this process will be. However this could lead to a situation where only non-risk seeking companies are left, therefore there needs to be some minimum level of wronging present (e.g. a minimum time waiting or a minimum threshold of bad food).
This can be instated by raising the difficulty of filing the complaint. This will mean that more wronging needs to be done for people to acquire enough 'revenge-utility' to make the complaint. Or alternatively by simply instating minimum requirements. In practice both of these mechanisms are there. However the first one also reduces the frequency of complaining, thus reducing the speed evolutionary process.
But there is another thing that might happen: the customer might be bought of from filling his complaint. This can be done by giving him a free meal or just being very kind to him. In the case of actually providing services this creates a nice situation: the customer can replace 'revenge-utility' with real utility. This makes a nice two player game where the company needs to make sure it always outbids the revenge appetite of the customer and will therefore always overbid. In any case even if the book is not filled in the customer still gets refunded.
In conclusion: the complaints book reduces the number of bad experiences for customers by changing the system of companies through evolutionary systems. It gives customers the chance of being compensated properly for the wronging occurred. And if all else fails the book provides a 'revenge utility' to the angry customer. I think this is one of the better innovations of the last decade and I would like to see a European wide implementation of the system.
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