Can experiencing positive affect during consumption make consumers feel that a brand is ‘theirs’? A recently published paper by Carina Thürridl (University of Amsterdam), Bernadette Kamleitner (WU Vienna), Ruta Ruzeviciute (University of Amsterdam), Sophie Süssenbach (WU Vienna), and Stephan Dickert (Queen Mary University London) answers that yes, it can! Among the authors of this paper, the readers of this blog can recognize many researchers who have been associated for long with the current blog as contributors. This team of researchers examined the role that positive affect may play in the development of psychological ownership. Across various studies with various product categories and real as well as fictitious brands, they found that experiencing positive affect during consumption induces stronger feelings of psychological ownership for a brand. They also found that this effect is stronger when a brand has an affective positioning in the first place. You can learn more about this research by having a look at the cartoon-style summary below. And if this triggers your curiosity further, you can read the complete article here. Don’t forget: for a maximum sense of psychological ownership, make sure you read it when being in a good mood! 
Category Archives: New Research
Pet owners want to be masters, not servants – which is why we value dogs more than cats
Colleen P. Kirk, New York Institute of Technology
Cat videos may rule the internet, but dogs possess mastery of their owners’ hearts – at least if spending is any guide.
A survey of pet owners found that they spent an average of US$2,883 in 2016 on 22 “common expenses” for their dogs, compared with $1,926 for cats, based on an analysis of the data collected for the 2017-2018 National Pet Owners Survey. The extra money went primarily toward vet visits and kennel boarding, but dog owners also spent more on treats, grooming and toys.
My new paper, “Dogs Have Masters, Cats Have Staff,” shines some light on why.
A growing market
Americans are spending more on pet care as an increasing share of U.S. households own an animal.
A little over two-thirds of all U.S. households own at least one pet, up from 56% in 1988, the first year of the National Pet Owners Survey.
And almost half of households own a dog, while just 38 percent have a cat. Generational trends suggest this divergence is likely to grow, as millennials are more likely to adopt a canine, while baby boomers tend to be cat lovers.
This is resulting in a growing market for pet-related products and services, which hit an estimated $72 billion in 2018, up from $46 billion a decade earlier.
A willingness to pay
My study builds on earlier research showing that dog owners are willing to spend more on their pets than cat owners – including to save their lives.
One reason suggested was that dog owners had stronger bonds to their pets, which prompted them to spend more on things like veterinary care.
My research uncovered a key factor indicating why dog owners feel more attached to their pets: Dogs are famously more compliant than cats. When owners feel in control of their pets, strong feelings of psychological ownership and emotional attachment develop. And pet owners want to be masters – not servants.
Like other marketing researchers, my work uses “willingness to pay” as an indicator of the economic, rather than emotional, value owners place on their pets. It shows – and compares – how much pet owners would pay to save their animal’s life.
AP Photo/Angie Wang
Who’s in control?
So I carried out three online experiments to explore the role of psychological ownership in these valuations.
In the first experiment, I asked dog or cat owners to write about their pet’s behavior so I could measure their feelings of control and psychological ownership. Participants then imagined their pet became ill and indicated the most they would be willing to pay for a life-saving surgery.
Dog owners, on average, said they would pay $10,689 to save the life of their pet, whereas cat owners offered less than half that. At the same time, dog owners tended to perceive more control and psychological ownership over their pets, suggesting this might be the reason for the difference in spending.
Of course, correlation is not causation. So in a second experiment, I asked participants how much they would be willing to pay to save their animal’s life after I had disturbed their sense of ownership. I did this by asking participants to imagine their pet’s behavior was a result of training it received from a previous owner.
As expected, disrupting their feelings of ownership eliminated the difference in valuation between dogs and cats.
Since pet owners like to control their animals, and since cats are less controllable than dogs, the third experiment went straight to the point: Does the owner value the dog or cat for its own sake or for its compliant behavior?
To find out, I again asked survey respondents to describe how much they’d be willing to pay to save their pet’s life, but this time I randomly assigned one of four scenarios: Participants were told they either own a dog, a cat, a dog that behaves like a cat, or a cat that behaves like a dog.
Participants reported they would pay $4,270 to save the life of their dog, but only $2,462 for their cat. However, this pattern was reversed when the pet’s behavior changed, with dog-behaving cats valued at $3,636, but cat-behaving dogs only $2,372.
These results clearly show that the animal’s behavior is what makes people willing to pay.
pixfix/shutterstock.com
Master or servant
These findings establish that psychological ownership is a driving factor in dog owners’ higher valuations.
People feel ownership because they perceive that they can control their pets’ behavior. This research even distinguishes the type of control that probably most stimulates ownership feelings: It’s not just physical control, such as being able to pick up an animal or drag it by a leash. Rather, it’s the animal’s voluntary compliance with its owner’s wishes.
No matter how cute and cuddly your kitties may be, they can’t compete with dogs when it comes to giving pet owners the sense of mastery they seek.
This article has been updated to correct how much pet owners say they spend on their cats and explain the data more completely.
Colleen P. Kirk, Assistant Professor of Marketing, New York Institute of Technology
This article is republished from The Conversation under a Creative Commons license. Read the original article.
“I found this bar on my own!” Here is what happens next…
Have you ever found a bar or a café on your own, without any prior information or recommendations from others? If yes, have you ever wondered what consequences the sense that this venue is ‘your’ discovery might have on your subsequent relationship with the venue? A new research by two contributors of this blog, Michail Kokkoris and Bernadette Kamleitner (WU Vienna University of Economics and Business), together with Erik Hoelzl (University of Cologne), examines this question and provides novel insights into service marketing. A series of studies including various methodologies (field study, representative survey, online and lab experiments) and various service domains (cafés, bars, restaurants) provides evidence that the way a venue is first found has an impact on customers’ attitudes and behaviors towards this venue. Specifically, when customers have the sense that they discovered a venue on their own (rather than assisted by some information or others’ recommendations), they report stronger bonds with the venue in terms of self-connection, emotional attachment, and psychological ownership. In turn, stronger customer bonds translate into higher customer loyalty. For example, a survey with a presentative sample of Viennese coffee-goers showed that customers who have discovered a venue on their own spend more money in the specific venue compared to other venues, plan to come back more often and are willing to pay more even in the case of price increases. However, this seems to hold only for discoveries with a positive outcome, that is, when the overall experience with the venue is outstanding in the first place. In short, the sense of own discovery may have some previously unacknowledged benefits for businesses – an idea that is perhaps ‘heretical’ in the era of social media, where most businesses strive for attention and visibility. Letting customers discover venues on their own and have this ‘eureka’ experience can have beneficial managerial implications. Next time you accidentally stumble on a bar that no one has talked to you about, be prepared: A long-lasting, intimate relationship between you and the bar might be just beginning!
You can read more about this research here.
“Mine” helps remind – also in toddlers
People tend to recall new pieces of information that are classified as “mine” better than information that is classified as “others’”. This effect has been called self-referencing. Why is that happening? Knowledge of oneself is vast and rich in detail. Therefore, anything that is directly associated with the self is encoded in greater detail and better linked to existing categories of knowledge. This increased elaboration and organization of information that is associated with the self subsequently results in higher recall. This well-established effect has been repeatedly demonstrated in adults, but research in kids is sparse. Moreover, it remains unclear at what age the self-referencing effect first appears. This is the research gap that Emma L. Axelsson (Australian National University, Australia; Uppsala University, Sweden), Rachelle L. Dawson, Sharon Y. Yim and Tashfia Quddus (Australian National University, Australia) tried to fill with their recent research. In their study, they used the self-reference ownership paradigm with 3-year-old children and examined their retention of novel words. Specifically, children were presented with novel word-object pairings. For some of the objects they were told that they belonged to them, whereas for others they were told that they belonged to others. Immediately after this task, it was found that children recalled much better the self-referenced words than the other-referenced words. However, the difference between self-referenced and other-referenced words dissipated when children were tested 4 hours later or the next morning. The importance of these findings is that they show for the first time that toddlers already at the age of 3 have an improved memory of words classified as “mine”, although this seems to diminish over time. Apparently, the self-referencing effect is rooted in early developmental stages of humans. Take advantage of this finding and next time you want a toddler to memorize a word, make sure you pair it with “their” toy!
You can read more about this research here.
Listening to my music – and wanting more of it
A recent study shows the relevance of psychological ownership theory in the domain of music streaming. Music streaming services have become the most popular way of consuming music nowadays. What characterizes the use of these services is a lack of legal ownership of the music that consumers listen to. But can consumers nevertheless develop feelings of psychological ownership? And what effects can that practically have? Sebastian Danckwerts and Peter Kenning (Heinrich‐Heine‐Universität, Düsseldorf, Germany) conducted a study to address these questions. The results show that consumers can indeed develop feelings of psychological ownership both of the service and the music featured. More importantly, this research also shows that music‐based psychological ownership is a predictor of users’ intention to switch from free to premium. Therefore, helping consumers develop a sense of psychological ownership may be profitable for providers of music streaming services.
You can read more about this research here.
Ownership of the Birth Experience
A GUEST COMMENTARY BY YASMINE L. KONHEIM-KALKSTEIN
Photo by Ignacio Campo on Unsplash
Over the past few years, I have delved into research on childbirth. My research always gets inspired by something personal, and this line of research was no exception. I had a horrible first birth experience, where things felt out-of-control, scary, and resulted in an emergency cesarean birth. I was left traumatized and upset. I had a healthy baby, but sometimes this made me feel guilty that I was upset over my birth experience. It turns out, I was not alone in struggling with the memory of my birth experience. Many women desire a sense of ownership of their birth experience. They desire a certain experience and a feeling of control, in addition to the clear goal of a healthy outcome. While birth usually ends with the positive outcome of a baby being born, many women experience negative feelings after birth, particularly when their birth did not go according to expectations.
Decision making during childbirth is particularly unique, in that it requires negotiating the risks of mother and unborn baby, interpreting uncertain diagnostic information, and balancing a patient’s desire for control with the authority of the healthcare provider, in an event that can stretch for days with ongoing challenges. And sometimes the challenges mean a deviation from a woman’s initial expectations.
A common instance of unmet expectations is an unplanned cesarean delivery (UPCD). Compared with planned cesareans and vaginal births, women with UPCDs experience greater disappointment and feelings of failure, are at greater risk for postpartum depression, and post-traumatic stress.
My own research has revealed that support during an unexpected birth experience matters, and can come in many forms: emotional support, informational support, decisional inclusion, and even just practical support (such as handing someone a pillow) (Konheim-Kalkstein, Miron-Shatz, & Israel, 2018). In our research, we found that being included in decisions and being given emotional support were more predictive of satisfaction during an unplanned cesarean birth than a woman’s personality, her desire for control, or how prepared she felt going into childbirth (Konheim-Kalkstein & Miron-Shatz, in preparation). In other words, what happens during the experience matters. We also found that emotional support during labor and delivery can mitigate regrets women have about their experience, and is associated with women advocating for themselves.
Including women in the decision-making process, or at least giving them emotional support helps them retain a sense of ownership over the experience. We are currently analyzing data from women who describe the least supportive moment of their birth experience. In moments where women felt least supported, some women described a loss of ownership over what was happening in their environment.
For example, women shared how they felt least supported when conversations or jokes they didn’t want to hear intruded on their experience:
“When my doctors and nurses were talking about baby names they hated while I was being cut open”
“The hospital staff was making jokes to one another preparing me for the csection. Inside jokes while I was worried about my baby. It felt awful.”
Women shared about the moments they were not provided with an explanation of what was happening. They were missing information to help them feel in control.
“just told me I was having csection didn’t really give much help or explanation.”
“when no one would tell me why I couldn’t see my baby”
Women shared about moments when they were dismissed by healthcare providers.
“when no one was listening to me during the c-section when I said it hurt/I could feel it while I was being stitched up”
“when my doctor didn’t bother to tell me the baby was born nor if we were both okay…”
Women also shared about when they weren’t included in decision-making:
“I didn’t realize I even had an option to hold off on having a csection”
“When deciding how I was going to deliver. I was not included in anything, just told what to do”
A core value of patient-centered care is the principal of shared decision making, where important medical decisions happen in conjunction with patients and by considering their values and preferences, the scientific outcomes, and the physician’s clinical expertise. For birth specifically, a feeling of control over the birthing process has been shown to be related to satisfaction. When women are dismissed, not informed, or not included, their birth satisfaction is affected.
In contrast to the quotes above, consider these moments women picked out as the ones they felt most supported in their unplanned cesarean birth experience.
“when the nurse asked if I wanted to her to stay when things started progressing”
“when the nurses took copies of my birth plan and passed them out”
“my Ob drove in on during the middle of the night after 30 hours of labor for my emergency c-section. Before the surgery, he held my hands and asked if I was okay and explained what was happening and how I might feel as different things happened in the surgery. He made me feel very heard and considered and valued…”
In childbirth, when birth plans go awry, a woman loses some control. After all, a healthy mother and baby is, above all, most important. However, our research highlights the importance of emotional support and decisional inclusion. Women don’t expect to be the experts in the delivery room. But they do benefit from being informed, included, and at the very least, feeling heard. Giving a woman control where possible (e.g., letting her decide little things like music during surgery), acknowledging the loss of her plan (taking that extra minute to empathize), and providing information can help a woman still feel as if she owns her birth experience.
Research published:
https://pediatrics.jmir.org/2018/2/e12206
About the author: Yasmine L. Kohnheim-Kalkstein, P.h.D. currently works at the Mount Saint Mary College. Yasmine does research in Health Psychology, Educational Psychology and Cognitive Science.
Whose is it? How young children use territory to understand ownership.
A GUEST COMMENTARY BY ORI FRIEDMAN
Suppose you walk by a house and see a potted plant in the yard. You may not know who lives in the house, but you can be pretty sure the plant belongs to that person. This example illustrates how easily we can use territory to make judgments about ownership. But sometimes these judgments may be more complicated. Suppose an undiscovered diamond is buried in the yard. Or suppose a bird took an earring from someone’s window ledge, and dropped into the yard. Would these things also belong to the person living in the house? Regardless of how you answer these questions, your answers to these kinds of questions may be informative about how you understand ownership, and how you understand the relation between territories (like the yard) and things found in them.
To explore the roots of this understanding, my graduate student, Brandon Goulding, and I examined how young children answer such questions. We conducted six experiments. In each experiment, young children were shown simple pictures of two houses and their yards. There was a man in front of one of the houses, and we asked children about whether this man owned various objects that were in each yard.
In our first experiment, the objects were things commonly found in people’s front yards in Canada (i.e., where we and the participating children live). Our participating children were aged 3 to 5, and at all ages they mostly said the man owned the things in his yard, and they were likely likely to say he owned the things in his neighbor’s yard. These findings gave us a first indication that young children use an object’s location to figure out who owns it. It might seem obvious that children should make such judgments, but it is worth remembering that children never saw anyone touch or use the objects.
In our next experiments, we wanted to see how children would respond for objects that the homeowner did not intentionally acquire or even know about. In the second experiment, the yards were initially bare. But while the man was away, seeds blew into the yards, and beautiful flowers and ugly weeds quickly grew in them. The participating children (3-5-year-olds) were more likely to say the man owned plants in his yard, compared with ones in his neighbor’s yard. They were also a bit more likely to agree he owned flowers than weeds. This shows that children use territory to judge that people own objects they did not intentionally acquire. Our third experiment provided further support for this conclusion. There we found that 4-5-year-olds judge that homeowners own undiscovered and unknown objects buried in their yards.
In our three final experiments, we asked situations similar to my example of the bird that drops an earring into a yard. The earring presumably had an owner before the bird took it, so we might be reluctant to say the earring belongs to the owner of the yard. To get at children’s intuitions about these kinds of situations, we told them stories in which a silly dog moves objects in people’s yards. In some cases, the dog moved objects within a yard, while other times it took objects from one yard to another. The main finding from these experiments is that children aged 4-6 years (but not those aged 3 years) do not simply judge that the objects that ended up in the man’s yard belonged to him. Instead, their responses depended on where the objects started. For example, if the dog moved an object out of the man’s yard, children still affirmed it belonged to him. And if the dog moved an object into the man’s yard, they typically denied it was his.
Together, these findings show that young children have a sophisticated understanding about the relation between who owns an object, and the territory in which it is currently. As we detail in the paper, the findings are also informative about the mechanisms that underlie children’s reasoning about ownership.
This research is joint work between Brandon W. Goulding and Ori Friedman of the University of Waterloo. It was recently published in the journal Cognition.
Reference:
Brandon W. Goulding, Ori Friedman. The development of territory-based inferences of ownership. Cognition, 2018; 177: 142 DOI: 10.1016/j.cognition.2018.04.013
How Naming Products can Induce Feelings of Ownership and Affect Subsequent Consumer Responses
Giving names to the products we love is a common thing practiced in many parts of the world. From things that we rely on on a daily basis – like bicycles and cars – to goods that make our homes a bit homier – like soft toys or plants – an abundance of items lend themselves to individualization by their owner.
Recently, companies like Toyota have started to leverage consumers’ infatuation with the name game by activley encouraging them to name their cars as part of a marketing campaign. And while the Swedish furniture giant IKEA is keeping the aspect of consumer individualization to product assembly, it has at least itself been assigning fancy names to their products for years. Who is not familiar with the Pax’s and Billy’s of this world?
But does naming products actually make a difference when it comes to consumer responses? And if so, why? In a recently published paper in the Journal of Consumer Psychology, the authors Jennifer L. Stoner (University of North Dakota), Barbara Loken (University of Minnesota) and Ashley Stadler Blank (University of St. Thomas) explore this question. Across three experiments, they show that when consumers name their products, their evaluations of those products increase. Additionally, they find that this increase in product evaluation stems from a boost in psychological ownership consumers experience from naming. This boost in psychological ownership, is, in turn, driven by name fit and creativity – two aspects that are highly subjective and thus only of real magnitude when names are self-chosen as opposed to assigned.
Overall, their very interesting results open up a new substantive line of inquiry into the effects of naming products. More details about the research can be found by clicking [HERE].
Reference
Stoner, J. L., Loken, B. and Stadler Blank, A. (2018), The Name Game: How Naming Products Increases Psychological Ownership and Subsequent Consumer Evaluations. Journal of Consumer Psychology, 28: 130-137.
Whose creation is it anyways? Valuation of ideas versus labor in adults
Have you ever wondered what people value more in a creation, the idea behind it or the labor needed for its implementation – and who do they think owns the creation after all? Prior research has shown that children by the age of six begin to value ideas over labor. However, it is not clear whether the same applies also to adults. This is the question addressed by Pascal Burgmer (University of Cologne), Matthias Forstmann (Yale University) and Olga Stavrova (Tilburg University) in a paper recently published in the Journal of Experimental Psychology: General. In their research, they presented participants with products that were the outcome of a collaboration between two people: the one had the idea and the other one worked in order to make this idea come true. Then, the researchers asked participants to indicate which one of the two persons, the idea giver or the laborer, contributed more to the creation of the product as well as who deserves ownership of it. Results showed that, contrary to children, adults valued labor more than ideas. This effect was replicated across different contexts, such as books, movies, recipes or business plans for start-ups. These findings provide novel insights into beliefs about ownership and the role that the distinction between ideas and labor plays in shaping these beliefs.
You can read more about this research here.
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
The Science of Ownership 