Service-dominant logic

Service-dominant (S-D) logic, in behavioral economics, is an alternative theoretical framework for explaining value creation, through exchange, among configurations of actors. It is a dominant logic. The underlying idea of S-D logic is that humans apply their competences to benefit others and reciprocally benefit from others' applied competences through service-for-service exchange. Service-dominant logic has been developed by Stephen Vargo and Robert Lusch. The goal of developing S-D logic is to contribute to the understanding of human value co-creation, by developing an alternative to traditional logics of exchange. Since Vargo and Lush published the first S-D logic article, "Evolving to a New Dominant Logic for Marketing", in 2004, S-D logic has become a collaborative effort of numerous scholars across disciplines and it has been continually extended and elaborated (most frequently by Vargo and Lusch and in doing so, most of their references are their past papers, which should seriously decrease the validity of their papers). Among the most important extensions have been (1) the development of service ecosystems perspective that allows a more holistic, dynamic, and systemic perspective of value creation and (2) the emphasis of institutions and institutional arrangements as coordination mechanisms in such systems. At the core of S-D logic is the idea all exchanges can be viewed in terms of service-for-service exchange, the reciprocal application of resources for others' benefit (Vargo and Lusch, 2004). Focus on service (singular) steers attention to the process, patterns, and benefits of exchange, rather than the units of output that are exchanged (e.g., goods). S-D logic argues that in order to create value, that is to maintain and increase wellbeing and viability, actors engage in interdependent and reciprocally beneficial service exchange (Lusch and Vargo, 2014). Hence, value creation occurs in networks in which resources are exchanged among multiple actors and is therefore more accurately conceptualized as value cocreation (Vargo and Lusch, 2008, Vargo, Maglio and Akaka, 2009).