EVER WONDERED WHY YOU KEEP ALL THOSE APPS ON YOUR SMARTPHONE?

BY MARTIN P. FRITZE, ANDREAS B. EISINGERICH AND MARTIN BENKENSTEIN

Consumers acquire material possessions as tangible expressions of their identity, extend themselves through products, and use material possessions as symbolic markers of group membership. Given the profound power of material possessions and individuals’ attachment to them, significant research has been conducted in an effort to understand the positive and negative consequences of such possession attachment for consumers. However, more recently, there has been a call for reconceptualizing consumerism for digital markets. Today, digital services such as Spotify, Tidal, or Apple Music for music streaming, Tinder, Grindr, or eHarmony for online dating solutions, and PayPal, Alipay, or WeChat Pay for online payment offerings, extensively permeate consumers’ lives. Digital services are ubiquitous, especially in digitized economies and often lead to time-consuming activities and habits, which can dramatically affect individuals’ well-being, either positively or negatively. Importantly, digital service consumption compared to other services often comes with very low entry barriers. For example, obtaining a membership at a gym demands that customers make an effort (i.e., making an appointment, driving to the location, talking to sales staff) even before the consumption process has begun. The “let’s give it a try” barrier is much higher in terms of personal resource investment than for digital service consumption. Simply downloading a new app, trying out a streaming service, or registering on a social media platform takes only seconds and requires little resource investment. Therefore, we wanted to explore when and how consumers, if at all, form attachments to digital services technologies and examine the extent to which and why people immediately stick to a digital service after using it for the first time (i.e., they become instantaneously attached).

One of the most important and robust empirical findings noted in the context of ownership research is the endowment effect. In the series of previous experiments on the endowment effect, people assigned approximately twice the value to commonly desired material items such as pens or mugs when they were endowed with the item and asked to state prices to sell the item compared with people who were asked to make offers to buy these items. A novel and important contribution of our research is to examine the endowment effect’s instantaneous nature of the reference point shift and consequent value change for digital service technologies.

As a preliminary test of our theoretical perspective, we conducted a field study to examine the real-world relevance of the endowment effect for digital services. We followed the recommended standard procedures employed in most previous studies. According to the established experimental standard approach of the endowment effect, the participants are randomly designated owners (nonowners) of a target object (e.g., pens, mugs). They are then told that they are (not) allowed to keep the object. Owners (vs. nonowners) are asked about the amount of money for which they would be willing to sell (buy) the object, indicating their willingness to accept, “WTA” (willingness to pay for the object, “WTP”). The endowment effect is quantified by the resulting WTA‒WTP disparity (WTA>WTP). Accordingly, and simply put, in the prestudy we expected that actual users of a digital service technology will state higher prices to give up using the service (WTAU–S) than nonusers will be willing to pay (WTPNU–B) to start using it (WTAU–S > WTPNU–B). The study followed a quasi-experimental design and included one manipulated between-subjects factor (group: nonuser-seller, user-buyer) and one measured variable (price). The real-world digital service referred to is a complimentary mobile app offered at some universities. It provides students with information about canteen menus, available jobs, events, and accommodation offers, all customized to their particular university. An online survey was conducted at a university that provides the app to its students. Those participants who stated they did not know the app or did not currently use it were automatically assigned to the nonuser-buyer group. The participants who stated they currently used it were assigned to the user-seller group. We found that user-sellers stated significantly higher prices than nonuser-buyers. As such, the prestudy confirmed the endowment effect for digital services as it replicated prior results in the context of material products in the context of digital service technologies.

However, more recently the endowment effect’s main explanatory accounts (i.e. the underlying psychological processes that drive the effect) have been subject to academic debate. On the one hand, since the initial studies on the endowment effect, the effect has long been ascribed to loss aversion, i.e. fact that losses loom larger than gains. That is, owners state higher prices to sell an object than buyers are willing to pay for it because, for owners, giving away the object is a loss. This loss for the owners is more severe than the gain buyers derive from obtaining the object. Therefore, higher price evaluations for the object by owners are mainly driven by a perceived parting disutility. The main reason for this is that the accumulation of possessions provides existential security for individuals. It is noteworthy that this human behavior with its evolutionary heritage may even be independent of the object-related evaluation. On the other hand, a growing stream of research directly challenges the “loss aversion account” and instead highlights the “ownership account” to explain the endowment effect. According to the “ownership account”, the higher valuation of the target object relates to a special bond with the object, which in turn induces ownership utility. This is ascribed to a resulting possession‒self link, as the object is incorporated into the extended self, becoming a self-referential part of the person’s identity. Referring to the “ownership account”, the reluctance of giving up an object is related to a special meaning of the object for the owner.

In order to explain how consumers become instantaneously attached to digital service technologies, we conducted an online experiment where we employed an extended experimental design for separately testing the ownership and loss aversion account and putting both accounts into direct competition. Moreover, we expected that the differences in prevailing service characteristics (hedonic vs. utilitarian) are likely to influence the endowment effect for digital services because the instantaneous formation of proprietary feelings for external objects is driven by people’s foresight or expectations of the object’s future use. That is, people instantaneously develop proprietary feelings for an object after evaluating their future usage intentions. Specifically, people retain psychological possessions because of two underlying saving patterns: instrumental saving and sentimental saving. Instrumental saving refers to the perceived future need for an object. The object fulfills the purpose of solving a task, and the person acknowledges the possibility of being able to use the object in the future. Simply put, people hold onto such an object simply because they might need it in the future, even if they currently have no immediate need for using it (e.g., insurance policy, antivirus software). In contrast, sentimental saving occurs when an individual consciously acknowledges that the object is relevant to maintain the individual self-concept. Sentimental saving is determined by the person’s self-related feelings for the object (e.g., family video, lifestyle app).

Considering the different explanations of the endowment effect, we expected the endowment effect to hold for both hedonic and utilitarian digital services. However, we argue that the difference in the occurrence of the endowment effect for both types of digital services lies in the psychological processes driving the effect.

People should be more likely to hold onto utilitarian digital services based on instrumental saving because the usage of utilitarian services does not tie-in with consumers’ identities but rather their practicability triggers future usage considerations (i.e., “I might need it in the future”). This is related to the endowment effect because loss aversion occurs due to a reluctance to give away external objects even when such objects currently have no special meaning for the owner. In contrast, a hedonic digital service should serve as an extension of the person’s self and is thus a reminder of a relevant part of the self-concept. Hence, people should be likely to hold onto hedonic digital services based on sentimental saving because the usage of it ties in with consumers’ identities. This conscious acknowledgment of an object’s self-related importance relates the endowment effect’s “ownership account” because the reluctance to switch from a hedonic service should occur due to the self-related importance of the service for the user.

Taken together, in the experimental study we found that psychological processes underlying the endowment effect differ between utilitarian and hedonic digital services. Indeed, proprietary feelings towards utilitarian digital services occurred due to loss aversion, whereas proprietary feelings towards hedonic digital services reflect the consumer’s conscious self-relatedness to the digital service. Individuals consciously or unconsciously hold onto digital utilitarian services simply because they are reluctant to feel a loss when with regard to giving them up. In turn, digital hedonic services hold a special self-referred meaning to individuals.

Given the ongoing progress in artificial intelligence and the potential for virtual reality to act as the next “super drug”, further research on human attachment to digital service offerings is rich in potential. We invite additional research on what we believe is a promising and important field of work not only for business to better maneuver an environment with an increased offering of digital services but also to help humankind in the pursuit of self-understanding and autonomy.

This research was recently published in Electronic Commerce Research and can be accessed at: https://link.springer.com/article/10.1007/s10660-018-9309-8

 

Back Off, That’s Mine! How and When Consumers Express Their Feelings of Ownership with Territorial Responses.

BY COLLEEN P. KIRK, JOANN PECK AND SCOTT D. SWAIN

Consumers often come to feel a sense of ownership for products they do not necessarily legally own. For example, simply touching a product in a store or imagining owning a product can enhance consumers’ feelings of ownership. This sense of ownership, called psychological ownership, frequently leads to positive outcomes for marketers, such as increased word-of-mouth intentions and willingness to pay more for a product.

My research collaborators, Joann Peck, Scott Swain, and I wanted to examine an outcome from consumers’ psychological ownership that may not always be so positive: territoriality. Based on prior research, we expected that when consumers perceive someone is trying to claim psychological ownership of a product they feel ownership of themselves, there is potential for consumers to feel infringed and respond territorially. We wanted to explore how consumers perceive that others are communicating psychological ownership of a product, under what conditions they will feel infringed, and what outcomes might result.

Consumers come to feel ownership of a product in any one of three ways: either by controlling it, such as by moving it; by investing themselves in it, such as by customizing it; or by getting to know it intimately, such as growing up with it or using it in a special way. Accordingly, we believed that people might also communicate their psychological ownership to others by communicating their control, investment of self, or intimate knowledge of a product. We expected that these messages from other individuals would lead consumers to feel infringed when they felt ownership of the product themselves.

To examine this idea, we conducted five experiments, each designed to elicit or manipulate feelings of ownership in consumers and then have other people communicate, or signal, psychological ownership of the same product. In the first experiment, participants in a laboratory were told they would be dining in a restaurant by themselves. They poured themselves a cup of coffee from a bar at the side of the room, and then customized it with a wide variety of enhancements, such as various sugars, frothed milks, syrups, etc. In this way, they developed strong feelings of ownership for their coffee. They carried their customized coffee cup back to their table and were served a piece of cake. As the server then came over to each diner, she inquired “Is everything OK?” She then either moved the participant’s coffee cup for no apparent reason, or did not move it. A pretest showed that when the server moved the coffee cup for no apparent reason, participants perceived she was communicating psychological ownership of the coffee.

We found that participants whose coffee cup was moved tipped the server 25% less – a form of retaliation – and were more likely to pull the coffee cup closer to themselves and to display negative facial expressions. In a survey, these participants reported they felt that the server had infringed on their territory and that they were more likely to leave quickly and less likely to return to the restaurant.

Consumers can also become territorial over intangible products, such as an artistic design. In a second experiment, participants volunteered for a local nonprofit organization by decorating folders for children’s educational materials. They either copied a design onto the folder (low psychological ownership of the design) or created their own design on a folder (high psychological ownership of the design). Then, the nonprofit assistant either said or did not say “That looks like my design!” This statement communicated the assistant’s psychological ownership of the folder design. We found that participants who had designed their own folder and received the assistant’s ownership statement were less likely to pick up the assistant’s dropped pen and return it. In a survey, they once again reported that the assistant infringed on their territory and they perceived the assistant more negatively. They were also less likely to spread positive word-of-mouth, donate to the nonprofit, or return to volunteer again. Interestingly, they reported they would be more likely to post a selfie with their folder on social media. This is a way consumers attempt to defend against future infringements of their psychologically-owned property, by communicating their own claim to ownership.

In a third experiment, we elicited psychological ownership of a sweater in a retail store by having participants imagine touching and wearing it. Then another customer either touched the sweater, or asked permission and then touched it. Asking permission first dampened consumers’ feelings of infringement and reduced territorial responses. Some of the territorial responses elicited by the infringement included hostile expressions, picking up the sweater and holding it, putting down a separator bar, and retaliating by not telling the infringer about money they dropped.

A fourth experiment in a coffee shop showed that participants were less likely to respond territorially when the infringer had no way to know of their own feelings of ownership of a seat because they had not marked their territory with a belonging. In the final experiment, we manipulated participants’ psychological ownership of a delicious-looking pizza in an open-air market. We measured narcissism, and found that consumers higher in narcissism were more likely to believe that others are already aware of their feelings of ownership. Therefore, they were more likely than low narcissists to feel infringed and respond territorially when a stranger tried to claim ownership of the same pizza by communicating intimate knowledge about it.

With these five experiments, we show that it is important for marketers to think about situations in which consumers may be feeling a sense of ownership of a product, and how marketers’ actions and words might unknowingly elicit feelings of infringement and territorial responses. For example, a new sales clerk who displays too much pride in showing customers “his” offerings in “his” store may be inadvertently marking territory and thus putting off long-time customers who also have feelings of ownership for the store. Restaurant servers might be well-advised to acknowledge patrons’ psychological ownership with an “excuse me” before moving their dishes for no apparent reason. In addition, consumers may infringe on each other, even unintentionally. Unwanted consequences from infringement can include consumers’ leaving a store quickly, not returning to the store in the future, leaving a smaller tip, negative facial expressions and not telling the infringer about a dropped pen or money. Marketers can help by providing ways for consumers to protect their psychologically-owned items prior to purchase, such as with separator bars on conveyor belts and large shopping bags for temporarily holding items under consideration.

This research can help us not only in understanding territoriality and its implications in consumer behavior, but also to be more sensitive about when we might inadvertently be communicating feelings of ownership and eliciting territorial responses in others. Our findings about narcissism are also important. People high in narcissism are very self-centered and have a larger-than-real sense of themselves. We find that they believe other people automatically know of their feelings of ownership for an attractive product, even when there is no way they could know. As a result, they are quicker to feel infringed and respond territorially.

Territoriality is alive and well in consumer behavior and our research is a step towards understanding this common phenomenon.

This research was recently published in the Journal of Consumer Research and can be accessed at: https://academic.oup.com/jcr/article-abstract/45/1/148/4617692

 

A Researcher’s Perspective on Ownership: Bart Claus – We are what we have. Or were we?

A GUEST COMMENTARY BY BART CLAUS, ASSISTANT PROFESSOR OF MARKETING AT IÉSEG SCHOOL OF MANAGEMENT IN PARIS, FRANCE

TSOO: You have been doing research  in the field of ownership, could you please tell us the main insights?

To me ownership is one of the most fundamental phenomena in consumer behavior, even in human behavior in general. You see this when looking at how big a part of their active lives people commit to paying off a mortgage – 30 years standard in the U.S., but even longer in other countries. You see this in fashion item purchases. Even kids at very young age organize their worlds based on who owns what. Our sense of ownership is solidly hardwired in our human brain. Consequently, in my research I find that merely being assigned ownership literally changes peoples’ perspectives. Not only do they value their possessions more – a traditional effect – but physiological effects ensure that they literally see and remember objects more in detail, and see more difference with similar objects. In other words: everybody sees their own possessions as more unique than they actually are.

Furthermore, people mentally process owned objects as being closer to themselves – similar to processing objects that are physically close, or even similar to thinking about close friends and family. These findings make it easier to understand why we use the “my” that we use for “my socks” also for the chair that I happen to sit on (“my seat”) but also for “my friends” and “my home” (different of course from “my house”). These findings also clarify the central role possessions play in people’s identities, together with everything else we address with “my”. It is difficult to claim you are a sportswoman or –man if you don’t invest in the right apparel. Without owning a vast collection of records, it will be more difficult to pass yourself off as music lover.

Looking at that, these are interesting times. Until now, people often measured a successful life by the collection of items accumulated over this life, and often it was even exactly this collection that represented the life and owner’s identity itself. More and more, we engage in “liquid consumption” that in many cases doesn’t leave the trace of ownership. The emerging sharing economy, is one such example. In another research project, I look at the creation and destruction of value through sharing, finding that overall, sharing does create value. However, with the central role of ownership in our psychological and social structures, it remains to be seen how we will define identities and evaluate lives in which all accumulation of ownership has been replaced by access to shared goods, and how or life satisfaction will be affected.

Dr. Bart Claus (PhD in Applied Economic Sciences, KU Leuven) is an Assistant Professor of Marketing and Academic Director of the MSc. in International Business at IÉSEG School of Management in Paris, France. His research in consumer behavior focuses on the interplay between consumers’ social and personal identities on one hand, and consumer choice and ownership on the other hand. This research has attracted national and international funding, and has been published and presented widely in academic journals and conferences, and practitioner print outlets. In the past, he has consulted both companies and governments on marketing and communication strategy and issues related to behavioral change. He has experience in teaching from bachelor to executive level. If you want to know more about Bart, feel free to visit his profile at IÈSEG School of Management [CLICK HERE].

 

This article was originally published in transfer – Werbeforschung & Praxis, (03/ 2017) 

THE DEVELOPMENT OF JOB-BASED PSYCHOLOGICAL OWNERSHIP

A GUEST COMMENTARY BY BOBBY BULLOCK, CONSULTANT & RESEARCHER

The concept of psychological ownership (PO) as we know and understand today has originated from the field of organizational behavior and psychology. More precisely, Pierce, Kostova & Dirks (2001, 2003) were the first ones to coin the term and establish a theory of PO in organizations. Defined as “the state in which individuals feel as though the target of ownership (material or immaterial in nature) or a piece of it is “theirs”, they were able to show that PO develops through three distinct routes: control over, self-investment in, and intimate knowledge of the target of ownership (Pierce et al. 2003). In addition to these three routes, many scholars have argued that personality and disposition may also matter for the emergence of PO, yet this has never been properly tested.

In his PhD thesis, our current guest author Bobby Bullock, has explored this gap in the literature and has taken a closer look at the relationship between personality, job autonomy and psychological ownership. Moreover, he has looked at how the well-established routes through which PO is said to emerge come into play in the context of organizational employment.

But read for yourself what Bobby Bullock has to say:

Psychological ownership has come to light as an important state with strong implications on employee attitudes and behaviors.  However, relatively little attention has been paid towards the process by which employees come to develop feelings of psychological ownership towards their work, particularly regarding the role played by individual traits in this process.  Ownership theorists claim that personality and disposition should matter (Mayhew, Ashkanasy, Bramble, & Gardner, 2007; Pierce & Jussila, 2011), yet these claims remain largely untested.

The purpose of the current investigation is to address these gaps by exploring how employee disposition and job design contribute to the development of job-based psychological ownership.  Employing a cross-sectional approach, data were collected using an online survey where participants were asked to complete measures of trait positive affectivity (PA), job characteristics, work experiences, and job-based psychological ownership.  Because the study focused on job-related phenomena, participants were required to work full-time in a location other than their home to be considered for this study.  The final 426 participants (60.4% male, 39.6% female) had an average tenure of 5.04 years (SD = 5.03) and represented a wide range of industries and job levels (23.7% entry-level, 31.0% individual contributor, 17.8% supervisory, 10.8% mid-level manager, 2.8% senior manager, 13.8% technical or professional).  Hypotheses were tested using bootstrapped regression analyses and structural equation modeling.

Results indicated that job autonomy has a positive effect on job-based psychological ownership (B = 0.501, CI 0.415 to 0.594) through three mediated paths:  investment of ideas, effort, and self into one’s work (B = 0.252, CI 0.178 to 0.349), experienced control and influence over one’s work (B = 0.214, CI 0.137 to 0.293), and intimate knowledge and understanding of one’s job (B = 0.036, CI 0.003 to 0.082).  Employee PA significantly moderated the mediated path from autonomy to ownership through experienced control (Index of ModMed = 0.017, CI 0.000 to 0.045), such that control mattered more for high-PA employees.  Exploratory analyses suggest that PA may play a dual role – as a moderator of autonomy’s effects on control (B = 0.052, CI 0.009 to 0.100), and as an indirect effect on ownership itself.  For example, high-PA employees reported greater investment of self in their work, which in turn predicted job-based psychological ownership (B = 0.255, CI 0.177 to 0.361).

Ultimately, job autonomy stood out as having a particularly strong and consistent positive effect on job-based psychological ownership.  Results suggest that all employees, from the most enthusiastic to the most apathetic can experience this positive psychological state.  That is, as long as they are afforded a high level of autonomy in deciding how to plan and carry out their work.

If you are interested in reading the full paper including more detailed results, please click here.

About Bobby:

Dr. Robert Bullock is a management consultant with a background in industrial-organizational (I-O) psychology. Since 2010 he has been a staff consultant at Scontrino–Powell, Inc., a Seattle-based I-O consulting firm. As a consultant Robert specializes in qualitative and quantitative assessment (i.e., employee surveys, leadership evaluations, developmental needs assessments, organizational assessments, validation studies), learning and development (i.e., training workshops, on-the-job learning, leadership coaching, training evaluation), and continuous improvement (i.e., Lean workshops, continuous process improvement, culture change). He has provided those services to dozens of clients across a diverse range of sectors and industries, including Fortune 500 companies, state agencies, and the high-tech, education, health care, and non-profit sectors. As a scientist Robert has published and presented research on the psychology of ownership, organizational citizenship behaviors, and job design. He enjoys writing and has had articles published in several outlets including Forbes, Bloomberg, Profiles International, and more.

For more about Bobby, please click here.

Editor’s note: All references can be found in the whitepaper, which you can download here.

The Voice of Practice: How Technology is Challenging the Conventional Wisdom of Ownership

A GUEST COMMENTARY BY ERIK CHAN, TECH ENTREPRENEUR & CO-FOUNDER OF ROCKETCLUB.CO

So here it comes, the first The Voice of Practice contribution. What follows is a guest commentary by tech entrepreneur Erik Chan. Erik is the co-founder of RocketClub (www.rocketclub.co), an online platform that empowers people to earn shares of new business ideas by promoting and adopting them from the start. In his commentary he talks about how technology has changed the way ownership is viewed and what this means for the tech industry. Before we let Erik speak, however, let us from The Science of Ownership give you a small scientific bracket to the topic:

Sophisticated online social technologies have substantially altered the way consumers and companies interact and create value (Bernoff & Li 2008; Prahalad & Ramaswamy 2004). Traditionally, the former were simply listening to what the latter had to say and offer. Now, consumers are invited to actively participate in a variety of business-related decisions on social media and the likes (Berthon et al. 2008, Hautz et al. 2014). This power shift from the firm to the consumer has paved the way for novel concepts and business models like crowdfunding (Ordanini et al. 2011, Thürridl & Kamleitner 2016).

It has changed how new ideas, products and even firms are created. This, in turn, is challenging our conventional understanding of ownership – the line between what (is perceived to) belongs to the company and what to the consumers is becoming increasingly blurred. From literature we know that there are three major routes to ownership: control, intimate knowledge, and investment of the self (Pierce et al. 2001, 2003). When individuals co-create with companies or contribute their personal resources, all three routes may actually be activated. Consumers are able to a) control the outcome of the final product, service, or venture, b) acquire knowledge over time, and c) invest their own resources, ideas, values and identity into the process. In turn, they may start to feel that the respective product, idea, or venture is also “theirs”.

So much for the theory, let’s hear what Erik has to say about it:

In the technology startup industry, the idea of ownership holds much significance. We have seen controversies over who owned the idea behind successful companies of today; who owned the trademarks, who owned the code, and of course, who owned the equity. Each and every input in a company can have contributed to its success. While many controversies focus on the legal (and financial) components of successful companies, there is also a factor of pride. For cofounders, early employees, investors, it’s the opportunity to proclaim “I did this. I saw the potential in it. I made it happen. I was part of it.” Often, founders end up suing the company they founded for more than a share in the financial rewards, it’s also because they want to be recognized as an ‘owner’ or ‘contributor’.  

Recently, we have seen a lot of emphasis on a startup company’s initial users or customers. Ycombinator, the prominent startup accelerator who incubated successful companies including Reddit, Airbnb, and Dropbox, evangelizes the idea of acquiring 100 customers who love what your company offers than 10,000 who just care (see http://blogs.wsj.com/accelerators/2014/06/03/jessica-livingston-why-startups-need-to-focus-on-sales-not-marketing/). The idea is to acquire 100 customers who love your product so much they are willing to use it even when no one else is using it, bare through multiple product iterations, and deal with product bugs because they see and believe in the potential. These early customers believe that one day, just like the founder, they will be able to say “I was part of it.” Not surprisingly, the involvement of these customers also make them feel as if they ‘own’ the idea as well.

Although largely unscientific, tech startups do many things to try increase their users’ feeling of ownership’. Traditionally, these include awarding users with digital points and badges, offering physical articles like t-shirts and stickers, early access to new features, throwing events, and other exclusive priorities. Success examples include early Reddit users receiving t-shirts and handwritten christmas cards, the first AirBnb hosts welcoming the founders to sleep at their apartments, Facebook users staking their personal profile URLs and many more. 

Due to high startup company valuations today (cash rich startups offering an assortment of perks and freebies to their customers), many companies starting out face the challenge of whether a t-shirt is enough for its early users to feel a sense of ownership. Having struggled with rewarding early adopters for their involvement at my previous companies, I decided to build a platform called RocketClub to help companies distribute a real stake in the company to these early customers and supporters. The idea is that it is only a matter of time until early customers, critical to a company’s success, will transition from ‘psychological owners’ to also become real, legal owners. Consequently, we learned through numerous discussions with both company founders and our community of users that the feeling of ownership in a startup is not determined solely by equity ownership. And since, RocketClub has expanded to offering other means of facilitating this ownership through examples such as access to the founders, a say in the development of the product and features, as well as access to ongoing developments at the company, and many others.

Given the dizzying array of products new and old in the market today, entrepreneurs and managers are turning to incentivizing early users and customers to become part of the process/experience. The majority of startup companies fail today because they lack adoption from early stakeholder customers. Imparting ownership onto your early customers is one of few ways to help companies build a bridge between them. No company succeeds without a following behind it and early adoption goes hand in hand with imparting the psychological feeling of ownership.

What is your take? Do you agree with Erik or do you have contrary beliefs? Please use the comment section to share your thoughts with us and our readers.

About Erik:

A serial entrepreneur and technologist, Erik Chan is founder CEO of RocketClub. Previously, he cofounded MicroPay Technology, a game payments company, and social and online game companies 28wins and Bottomless Pit Games. Prior to Erik becoming an entrepreneur, he spent time at Activision Blizzard and Midway Games first as a system engineer and then as a producer. 

Erik holds a MSc in Management from Massachusetts Institute of Technology, a MBA from Tsinghua University, and a BSc in Biomedical engineering with computer science from Johns Hopkins University. Erik Chan also spent time doing research at the Center of Bits and Atoms and the Software Agents group at the MIT Media lab.

Editor’s note:

  • For references to the articles mentioned in this post, please visit our Links & Resources Section

She’s Proud of It: Psychological Ownership in a Digital World

colleeen_momMy mother is 83 years old and loves her iPhone. She prides herself on her ability to use it, explore it, and discover new apps, features and functions. Her self-confidence in uncovering new features is not particularly high, and it is easier for her to appropriate new functionality when one of her kids shows her what to do. But once she has adopted it, she makes it her own, telling anyone who will listen about her newfound feature or app. She considers herself highly innovative among the senior set, as she has friends who do not even use email, much less voice-controlled texting. When she is relaxed and has time on her hands, such as when we are out to lunch together, she is insistent that we download the latest Uber app* for her or show her a new gadget on her phone. However, when she has a deadline, as she still does these days as she is revising a paper for a journal or preparing a lecture on her latest musicology research, her beloved technology can be annoying and frustrating, and she has no interest in exploring or new appropriation.

My coauthor, Scott Swain, and I study this process of technology appropriation among consumers of all ages. How do we come to experience a sense of ownership (Pierce, Kostova, and Dirks 2003) of intangible goods such as digital content or technologies? Under what conditions does a sense of ownership emerge? What are the outcomes? And what are the individual differences among us that enhance or detract from this process?

In one of our recent articles with James Gaskin (Kirk, Swain, and Gaskin 2015), we argue a key emotion that plays a role in the emergence of psychological ownership in a digital context is pride. While pride is felt and displayed in the body as a unitary emotion, it actually has two facets which depend on how consumers attribute its source (Tracy and Robins 2007). When my mother works hard to learn a new app, as she has done in mastering the ability to “call an Uber” when she needs it, she is experiencing authentic pride, attributed to her effort. On the other hand, if she thinks about how much better she is than her senior friends at using technology, she might attribute her success at using the app to this superior ability and a touch of hubristic pride might creep into the mix. We look at this consumer technology appropriation process through the lens of customization or self-design (Franke, Schreier, and Kaiser 2010; Moreau and Herd 2010), arguing that as consumers invest themselves in learning and interacting with digital technologies, the process is a kind of experienced or unintentional self-design. This investment of self elicits authentic pride which enhances psychological ownership.

The social aspect of digital technologies also plays a key role in the emergence of psychological ownership. Pride is a self-conscious emotion which is activated more strongly in the presence of others. For example, as consumers, as we think about creating content that is seen by others, this opportunity to validate our identity in a digital realm (Karahanna, Xu, and Zhang 2015) or even co-construct an aggregate extended self with others (Belk 2013) results in feelings of pride. When we attribute this pride to our own efforts, our sense of ownership of the digital content is enhanced. At the same time, when hubristic pride is an outcome, we enhance ourselves by valuing psychologically owned content and technologies more highly and telling other people about them.

Scott and I have conducted a number of studies that examine these and other ideas experimentally. We have found that we as consumers will experience stronger feelings of ownership of interactive digital content when we are motivated to enjoy ourselves than when we are trying to accomplish a specific task. But this depends on the connectedness we feel with others who may also be occupying the same digital space. We have also found that simply perceiving the opportunity to interact with digital content may be sufficient to elicit psychological ownership, depending on how involved we are with the subject matter at hand. Interactivity becomes a way to “touch” (Peck and Shu 2009) the intangible. We are also exploring the role of both facets of pride and how focusing on self versus others may have an impact.

Psychological ownership has piqued the interest of marketing researchers recently, and for good reason (Jussila et al. 2015; Kamleitner and Feuchtl 2015). Feelings of ownership have a strong effect on important marketing outcomes, such as product demand (Fuchs, Prandelli, and Schreier 2010), economic valuation (Brasel and Gips 2014; Shu and Peck 2011), and word of mouth (Kirk, McSherry, and Swain in press). While researchers are beginning to get a handle on the emergence of psychological ownership among consumers of tangible goods, Scott and I are trying to uncover an understanding of how consumers come to experience psychological ownership in an intangible digital world. Given the accelerating role digital technologies are playing in our lives, we may all have something to be proud of.

*Uber is an American international transportation network company headquartered in San Francisco, California. It develops, markets and operates the Uber mobile app, which allows consumers to submit a trip request which is then routed to sharing economy drivers (for more information visit www.uber.com)

Editor’s note:

Keeping up with the Joneses: Thoughts About Income Inequality, Status Competition and Psychological Ownership

Like many of the members of this blog, I am interested in theories that attempt to capture the cognitive and affective components of psychological ownership. I believe that an important avenue for future research is investigation of the role of our possessions in the dynamically evolving socio-economic context. I would therefore like to use this opportunity to highlight a potentially interesting new angle in studying the role our belongings play in our lives. A growing body of empirical evidence shows that there is a strong negative relationship between income inequality and various indices of societal well-being. Income inequality is seen in distributions of income if a large proportion of income is received by a small percentage of the population, leading in turn to even greater wealth inequalities. For example, in a highly unequal country such as USA, the wealthiest 1% possess approximately 40% of all the wealth. Contrary to the predictions of economists, the money does not flow from the richest to the poorest, and income inequality worsens with time. Why is this an important issue? A great deal of evidence now shows that when large gaps in income and wealth exist between the richest and the poorest, society suffers from a range of socio-economic maladies. Income inequality is positively associated with the number of teenage pregnancies, homicides, imprisonment rates and obesity. At the same time, it is negatively correlated with social mobility and general level of trust in a society. For a great review I would recommend an excellent book by Wilkinson and Pickett (2009 – reference at the bottom).

In my research, I have been particularly interested in the psychological mechanisms that may explain the impact of inequality. One account is based on status-seeking tendencies. Some theories, such as the social rank hypothesis (Brown, G. D. A., Boyce, C. J., & Wood, 2014; Walasek & Brown, 2015), argue that when income distribution is more unequal, income becomes a better signal of our social status. What follows is that inequality will promote positional consumption, whereby people spend more time and effort to seek high-status goods. In order to “keep up with the Joneses” people become more materialistic, surrounding themselves with fancy cars (Bricker et al., 2014), bigger houses (Cynamon & Fazzari, 2013), luxurious brands (Chao & Schor, 1996). In fact, evidence from economics shows that in order to afford these goods, people work longer hours (Bowles & Park, 2005). Nonetheless, they are still more likely to take on debt (Perugini, Jens, & Collie, 2015) or declare bankruptcy (Alvarez-Cuadrado & Attar, 2012). According to the social rank hypothesis, focus on status consumption takes away from other important aspects of life, such as efforts to promote a healthy social relationships or looking after one’s own health. In one of our recent studies, together with Gordon Brown (2015), we have shown that when income inequality is high, people search Google for luxury brands and products, such as Prada, Gucci, Chanel, fur vests, jewellery etc. Thus, when distribution of income in a society is unequal, people become more interested in status competition, which is reflected in their interest in positional goods.

How this is all related to psychological ownership? As income inequality becomes recognized as a serious challenge to the well-being in our society, the role our possessions play in our lives may be changing. Many theories of psychological ownership maintain that belongings play an important role for our self-identity, satisfying many critical psychological needs (Pierce & Jussila, 2011). What happens when the utility of our belongings comes from the role they play in status competition? If we spend our money to show off our new watch or fur coat, are we unavoidably less attached to these goods? Or, perhaps, do we develop feelings of ownership towards objects while they allow us to signal our status, with these feelings dissipating when we realize that the good is owned by everyone else? Since these goods are quickly dispensable, being replaced by newer and swankier models and brands, it seems that there is little space for psychological ownership to develop. I should note that this issue is not just related to materialistic consumption but to positional consumption. For the former, owning material goods presents value in itself. For the latter, utility from owning a good comes from the fact that few others own such possession.

These and many other questions make me wonder about the ever-changing meaning of ownership in our society. It reminds me of an excellent talk by Russell Belk at the Vienna Ownership Workshop, who presented compelling evidence that the sense of owning changes (if not depreciates) with the growing popularity of shared goods and services (Belk, 2010). I think that more work needs to be done in order to explore how the concept of psychological ownership changes along with the values in a society that are determined by the socio-economic circumstances.

Perhaps this research has been already done and I am just not aware of it. Just let me know if this is the case.

Editor’s note: