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

 

May we introduce: Graham Brown

“[What surprises me about psychological ownership is] that these feelings can overpower rationality. People overvalue their possessions despite objective information. People will confront others who they feel have infringed on their “territory” even if those people were trying to help.”

After quite a long break, we are back with a new interview for our Featured section. In this feature we would like to introduce Graham Brown from the Peter B. Gustavson School of Busines at the University of Victoria. In his interview, he talks about how he got into psychological ownership research and what as well as who influenced him the most in his own pursuit of the topic.

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Generally, Graham’s research focuses on territoriality and psychological ownership. He applies these two threads to a variety of research topics including negotiation, creativity, and workplace conflict. His recent research focuses on the impact that feelings of ownership have on innovation and new venture success with the thesis that feelings of ownership are both positive in that they propel efforts but simultaneously negative in that they create resistance to help and feedback from others. He hopes to achieve a better understanding of the factors that lead to entrepreneurial success. His work has been published in the Academy of Management Review, Organization Science, and Organizational Behavior and Human Decision Processes and featured in Harvard Business Review online. His teaching focus is in the areas of human resource management, leadership and negotiation and he applies these concepts to help others discover and use their passion to lead and create.

As an active entrepreneur Graham has been involved in several ventures in the travel and education industry including one company that he started while a student at the University of Victoria. His most recent project involves developing a training program to help high school students become social entrepreneurs. Graham also lives on and operates an active berry farm in Metchosin with his wife and four children.

For the full interview simply follow us this way.

 

Traces left by previous owners and evaluation of used goods

How do visible traces of previous owners on products in secondary markets affect buyers’ evaluations? This is an interesting question for secondary markets like eBay, where thousands of used goods are sold and products start a second life after having being disposed by their initial owners. However, as many consumers tend to customize or personalize their products, this may leave on the products visible traces of the previous owners. How does that affect potential buyers’ evaluations of these goods? Jungkeun Kim (Auckland University of Technology, New Zealand) examined this question in several studies. He found that buyers evaluate used goods with salient traces of previous owners less positively because the salience of these traces makes it harder for potential buyers to psychologically appropriate the product and develop feelings of psychological ownership. Analyses of actual transactions from eBay.com also confirmed this effect. Apparently, making used goods ours presupposes forgetting that they used to be someone else’s; and erasing previous owners’ traces – even literally, e.g. with a cleaning service, as these studies show – may help overcome these psychological barriers that may prevent us from buying used goods.

You can read more about this research here.

“The Future of Ownership Research” Workshop 2017

As already announced earlier this month, our team hosted an interdisciplinary workshop on ownership research at the WU Vienna University of Economics and Business in collaboration with our colleagues Joann Peck (University of Wisconsin-Madison) and Stephan Dickert (Queen Mary University of London).

Ownership_Workshop_2017_90

The Origanizational Committee

The workshop took place on July 7th and 8th and we are now happy to be able to share the highlights of this special get-together with you. You will find a detailled report by [CLICKING HERE]. Alternatively, you can also reach the page through the main navigation under the “events” tab.

We are still in the process of adding more material as we go so make sure to check back regularly for new insights on the future of ownership research.

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.

Introducing Our New Category: The Voice of Practice

voiceofpractice

Dear community,

Science – including The Science of Ownership – would not matter as much, if it had no implications for and would not be inspired by the real world out there. Though The Science of Ownership is primarily about research on the notion of ownership, we decided to extend our current lens and introduce a brand new category to this blog: The Voice of Practice.

As the name already suggests, we are trying to get practitioners and non-researchers views to find out how, why, when, and most importantly where the experience of ownership strikes and impacts our daily lives. We will co-operate with industry experts and potentially also interested lay people. We will give them the chance to reflect on the topic of ownership based on their practical know-how and everyday experiences. Sometimes, we will invite people. At other times, we will introduce individuals who have approached us.

Either way, we are excited to see how this new category will contribute to our vision: to create a much-needed and unified understanding of the diverse and fascinating concept of ownership.

If you have comments or questions on The Voice of Practice or would like to see a particular voice featured, please feel free to contact us anytime. For now, we wish you a lovely week.

All the best,

The Science of Ownership Team