Rethinking the Experiential Advantage on Consumption...

Rethinking the Experiential Advantage on Consumption Happiness

Joseph K. Goodman

Associate Professor of Marketing

Marketing in Israel 13

•  Brittney Dalton, Washington Univ. in St Louis

•  Julie Irwin, The University of Texas at Austin

•  Selin Malkoc, Washington Univ. in St Louis

•  Leonardo Nicolao, TCU

•  Joachim Vosgerau, Tilburg University

Collaborators

What would make you happier?

The Experiential Advantage

•  Experiences make people happier than “luxurious goods” or “pecuniary market objects”

(eg, Van Boven & Gilovich 2003; Easterlin 2003; Frank 1999; Scitovsky 1976; Hume 1975/1737)

•  “Experience Recommendation” à We should buy experiences, not material goods

•  Multiple Advantages •  Less Comparable/Interchangeable (Carter & Gilovich 2010;

Rosenzweig & Gilovich 2012)

•  Central to one’s identity (Carter & Gilovich 2012)

•  More social (Caprariello & Reis 2013)

•  Slower to adaptat (Nicolao, Irwin, & Goodman 2009)

•  Do material goods have advantages?

Five Advantages to Material Purchases

1.  Less extreme (in good and bad) When purchases go bad (Nicolao, Irwin, & Goodman 2009)

2.  More enduring in memory Marking special achievements (Dalton, Goodman, & Malkoc)

3.  Easier to justify The case of indulgence (Dalton & Goodman)

4.  More traditional & require less effort The case of gift giving (Goodman)

5.  Can be experienced The case of being “in the moment” (Goodman, Vosgerau, & Malkoc)

1. Material Purchases are Less Extreme

Recall a purchase that turned out positively (negatively)…

(Nicolao, Irwin, & Goodman 2009)

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Negative Positive

Mea

n H

appi

ness

Material Purchase

Experiential Purchase

2. Material Purchases are More Enduring

•  Material goods are memory markers (Zauberman, Ratner, & Kim 2009)

•  If so, what is the best way to mark a special achievement? •  Celebrate (ie, an experience) •  Commemorate (ie, material good)

•  Commemorate à create a longer lasting memory

Wedding Study: Better to Commemorate in the Long Run

•  N = 152 married U.S. Mturk workers who had a reception/ring

•  Independent Variables: •  Prime: Experiential (wedding reception) vs. Material

(wedding ring)

•  Measured Time since wedding (log transformed)

•  DVs •  Memory of achievement •  Purchase reminds me of achievement (mediator)

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Mem

ory

of A

chie

vem

ent

Time: Years Since Married

Better Memory from Ring, not Reception

Celebrate: Reception

Commemoration: Ring

Ring is a Better Reminder of Achievement over Time

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hase

is a

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inde

r of

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ieve

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Time: Years Since Married

Celebrate: Reception

Commemoration: Ring

Commemorating Increases Positive Affect via Memory

Mediation: Significant indirect effects with bootstrapping

Stronger Memory

Commemorating (vs. Celebrating)

Reminder

What Is the Best Way to Mark an Achievement or Special Occasion?

•  N = 124 U.S. Mturk workers described purchase following graduation

•  Independent Variables: •  Prime: Experiential vs. Material

•  “Did you do (get) something to celebrate (commemorate) your graduation?”

•  Measured Time since graduation (log transformed)

•  Dependent Variables •  Positive affect with achievement •  Memory of achievement •  Purchase reminds me of achievement

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emor

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Ach

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Time: Years Since Graduation

Commemoration Increased Memory over Time

Celebration

Commemoration

Commemoration is a Better Reminder of Achievement over Time

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4 8 12 16 20 24 Purc

hase

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inde

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chie

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Time: Years Since Graduation

Celebration

Commemoration

Commemoration Increases Positive Affect over Time

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Posi

tive

Affe

ct

Celebration

Commemoration

Commemorating Increases Positive Affect via Memory

Mediation: Significant indirect effects with bootstrapping

More Positive Affect

Commemorating (vs. Celebrating)

Stronger Memories Reminder

3. Material Purchases are Easier to Justify

•  Important when trying to indulge or looking for a “license to indulge”

•  When trying to indulge, easier to justify utilitarian purchases (Kivetz & Zheng 2006; Okada, 2005; Zemack-Rugar, Bettman, & Fitzsimons)

•  If so, then justification should lead to choosing more material goods

Justification à More utilitarian à Choose more material goods

Does Justifying Lead to more Material Purchases?

•  Scenario: Have extra $1000 to spend from savings (bonus). What would you purchase? •  N = 252 U.S. MTurk Participants

•  2(Justification vs. Control) x 2(Windfall/Bonus vs. Savings) •  Justification Manipulation: We would also like you to explain to

a friend why you made this purchase

•  DV: Item purchased (experiential-material) •  2 coders rated items on 5-pt scale

Yes! Justification Increases Material Purchases

More Material

More Experiential 2.2

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Bonus Saving

No Justification Justification

Justification vs. No Justification: p < .05 Bonus vs. Savings: ns (Dalton & Goodman working paper)

Justifications to Utilitarian to Material Purchases

•  2(Justification vs Control) •  N = 314 U.S. MTurk Participants

•  Scenario: Have extra $100 to spend. What would you purchase?

•  Measure •  Utilitarian (5 items) •  Hedonic (5 items) •  Material-Experiential Rating: “primary intention

to acquire a material good or a life experience”

Justification Leads to Material Purchases

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No Justification

Justification

More Material

More Experiential

Justification Leads to More Utilitarian Purchases (& not Hedonic)

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Hedonic

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Utilitarian

Utilitarian Aspects Mediates Effect, Hedonic Aspects Do Not

Bootstrapping: •  Significant indirect effect via utilitarian •  No indirect effect through hedonic

Material Purchase

Utilitarian Rating

Purchase Justification

4. Material Purchases are Traditional & Effortless

•  Being traditional and thoughtful are important considerations in gift giving literature (eg, Belk 1996)

•  Givers’ gift choices should reflect traditional and thoughtfulness and thus lead to •  More instances of material gifts •  No difference in prediction of happiness with material

vs. experiential gifts

Are Material Gifts Different?

Characteristics Material

Gifts Experiential

Gifts t p

Traditional 3.92 3.56 2.27 0.02

Memorable 4.81 5.03 1.49 0.14

Enjoyable 5.58 5.63 0.42 0.69

Risk 2.22 2.42 1.34 0.18

Appreciate 5.84 5.89 0.48 0.63

Decision Difficulty 2.88 2.92 0.25 0.80

Giver Effort 3.29 3.41 0.68 0.49

Receiver Effort 2.06 2.89 5.58 <.01

N = 405 givers, material vs experiential between subjects

ns

But not more enjoyable

Most Gifts are Material

•  N = 100 U.S Mturk workers, > 95% approval

•  Recall a gift given for holidays or birthday •  Rate gifts on 7-point scale

•  Most are material •  81% of holiday gifts (< midpoint of 4) •  66% of birthday gifts (< midpoint of 4)

Do Receivers & Givers Show an Experiential Advantage?

" 2(Give vs. Receive) x 2(Material vs. Experiential)

between subjects N = 159 undergrads

" “…tell us about an experiential (material) gift that you gave to (received from) someone for the holidays that costs under $50”

" Happiness of Receiver (3 q’s): “When the receiver (you) thinks of this gift, how happy does it make the person you (you) gave it to?

Givers Do Not Estimate an Advantage

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By Givers By Receivers

Hap

pine

ss

Happiness of Receiver

Material Gift

Experiential Gift

Do Givers Predict the Effect?

•  2(give vs. receive)

•  Recall 3 gifts •  Rate each in terms of happiness (same 3 measures) •  Rate each on material-experiential continuum (7-pt scale) •  N = 127 undergrads

•  Hierarchical regression •  Regression for each person based on 3 gifts (g)

Happinessg = β0 + β1(Experience/Material)g •  If β1 > 0, then Experiential Advantage •  If β1 < 0, then Material Advantage

Again, Experiential Advantage Only for Receivers

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By Receivers By Givers

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e: E

xper

ienc

es v

s. M

ater

ial

Gift

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Happiness of Receiver Experiences led

to more Happiness

Material led to more Happiness

Some Material Purchases are “Owned”

Some Material Purchases can be “Experienced”

Experiences being “Obtained”

5. Material Purchases can be Experienced

Can Being “In the Moment” (in the “here and now”) make purchases feel more experiential?

Can Being “In the Moment” make Purchases feel more Experiential?

•  3 (Concrete, Abstract, Control) •  N = 226, Mturk

•  Rate 12 purchases on a material-experiential scale •  eg, TV, grill, speakers, cooking class, vacation

Purchases are more Experiential when In the Moment

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Concrete Abstract Control

All Purchases

Mor

e Ex

perie

ntia

l (v

s. M

ater

ial)

(Goodman, Malkoc, & Vosgerau working paper)

Does being In the Moment Enhance Happiness?

" Manipulate material vs. experiential " “…tell us about an experiential (material)

purchase you made”

" Manipulate Mental Construal: " Abstract vs Concrete

" Happiness (3 q’s from previous studies) N = 338 U.S. Mturk

Yes! In the Moment Increases Retrospective Happiness

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Material Experiential

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pine

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Concrete Abstract

Advantages of Material Purchases

1.  Less extreme (in good and bad) When purchases go bad (Nicolao, Irwin & Goodman 2013)

2.  More traditional & easier to consumer The case of gift giving (Goodman 2013)

3.  More enduring in memory Marking special achievements (Dalton, Goodman & Malkoc 2013)

4.  Easier to justify The case of indulgence (Dalton & Goodman 2013)

5.  Can be experienced The case of being “in the moment” (Goodman, Vosgerau & Malkoc 2013)

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