Product customization can be viewed as a way for consumers to create value for themselves (Vargo and Lusch 2004), and has been shown to impact consumers’ appraisal of value beyond simply increased preference fit (Franke, Schreier, and Kaiser 2010; Fuchs, Prandelli, and Schreier 2010). Extending this perspective to new media such as digital books and social media websites, product interactivity can be thought of as a means of customization as it allows consumers to modify their view and experience with a facility that is not possible in more static digital environments (Liu and Shrum 2002). Despite its intuitive appeal, little research has examined the question of whether or when interactivity-as-customization translates into greater value-in-use and thus greater willingness to pay (WTP).
The present research proposes that psychological ownership (i.e., the feeling that “it is mine!”; Pierce, Kostova, and Dirks 2003, 86) is a key mediator of the link between perceived interactivity and WTP. That is, perceiving a product as interactive may only lead to greater willingness to pay to the extent that the perceptions also facilitate feelings of ownership. In so doing, we build on recent work which finds that psychological ownership enhances product valuation beyond what can be explained by improved preference fit (Fuchs, et al. 2010; Peck and Shu 2009) and may play an important role in the endowment effect (Shu and Peck 2011), or the tendency of consumers to value products they own more than identical products they do not (Morewedge, Shu, Gilbert, and Wilson 2009; Thaler 1980). Perceiving interactivity also requires the expenditure of “psychic energy” (Belk, 1988:144) and labor and we propose it leads to an increased sense of accomplishment which in turn drives psychological ownership.
Additionally, Vargo and Lusch (2004) argue that operand resources (those that require transformation by other resources to yield benefits; for example, goods and money) are often less important than operant resources (those that act upon other resources to yield benefits; for example, competence and knowledge) for creating value. A key insight of this perspective is that consumers, rather than firms, often possess the key operant resources in an exchange and thus should be considered “partners” in value creation. Applying this logic, we identify three consumer-based operant resources (technology innovativeness, enduring involvement, and self-assessed prior knowledge) which may enhance the translation of perceived interactivity into WTP.
The theoretical model was tested with data from 516 participants in an online survey using a 2 level (low objective interactivity versus high objective interactivity) between subjects design. Digital books were chosen as new media context for testing the hypotheses and two versions of a digital book, with pretested content, were created for the study. For the main study, participants answered questions concerning individual differences and were randomly assigned to either a low or a high interactivity condition. Respondents were then presented with instructions to read the digital book using a procedure adapted from Kaltcheva and Weitz (2006:111). After interacting with the book, participants completed measures relevant to the theoretical model. Published and validated measures were utilized for all constructs.
Measure reliability and validity were assessed using confirmatory factor analysis with maximum likelihood estimation in AMOS with acceptable model fit (χ2(459) = 991.50; CFI = .96; RMSEA = .05; NFI = .93) and offering evidence of internal consistency and discriminant validity. Tests for common method variance (Podsakoff, MacKenzie, Lee, and Podsakoff 2003) suggested CMV threat was negligible. Fit of the structural model was acceptable (χ2(524) = 1145.493; CFI = .914; RMSEA = .067; TLI = .905). For the full model with latent interaction terms, we used Latent Moderated Structural Equations (LMS) in Mplus 7 (Muthén and Muthén 2012). Tests of comparative model fit (Bryant and Satorra 2012) suggest the model that includes the hypothesized interactions provides a significantly better fit to the data than the baseline model.
Results broadly support our conceptualization. Our findings suggest that consumers can create measurable economic value for themselves through the enhanced psychological ownership that results from perceived interactivity, offering significant implications for research and management. Understanding the types of targets that are most likely to engender feelings of psychological ownership, along with the important roles of investment of self and perceived accomplishment, for example, and the value consumers may ascribe to the result, may assist managers with product design.