Better to have a book in the hand than two in the cloud: consumer preferences for physical over digital goods
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New technologies have given rise to digital versions of many goods including photographs, books, music, and movies. This dissertation examined whether people ascribe greater value to physical or digital goods with self-report and incentive compatible designs. I report ten experiments that elucidate the preference and identify greater establishment of psychological ownership for physical goods as the mechanism responsible for their greater valuation. I found that participants ascribed a higher value to physical versions of a variety of goods, whether measured in an incentive compatible pay-what-you-want paradigm, willingness to pay, or purchase intention. In Experiment 1, tourists paid more for a printed photograph of themselves with a costumed historical figure at a historical site than a similar digital photograph, even when controlling for the perceived cost of production. Experiment 2 found that this difference in valuation generalizes to other product categories such as books, music, movies, and magazine subscriptions. Experiment 3 suggested that the differences were not due to perceived consumption utility. Although participants ascribed greater value to physical goods, they believed their digital counterparts were more useful on every dimension measured. Experiment 4 ruled out a social signaling motive, as participants exhibited the same greater preference for physical versions of both high and lowbrow goods. Experiment 4 also found that estimates of the retail prices of digital and physical goods does not explain this preference. Experiment 5 identified psychological ownership as a driver of the higher valuation ascribed to physical goods. Psychological ownership and not assessments of permanence or anticipated consumption enjoyment mediated the effect of product format on willingness to pay (WTP). Experiments 6A and 6B provided further evidence for the ownership account. College students reported their WTP for buying or renting a digital or print copy of a course textbook. The WTP gap between physical and digital versions of the textbook was considerably greater in the purchase condition than rent condition. Whereas students were WTP more to buy than rent a physical textbook, they were not WTP more to buy than rent the same digital textbook. The rest of the studies further explored the ownership account and its implications.