The influence of non-physicality of goods on disparities in seller–buyer valuations: A meta-analysis

Journal of Consumer Psychology · 2024 · Volume 34 · Issue 3

Abstract

Technological innovation is shaping products and markets to appeal to consumer enduring needs. Given the rise in non-physicality of products and consumers' increasing participation in peer-to-peer markets, this research examines the relationship between non-physicality of goods and disparities in seller–buyer valuations, a critical component of market inefficiencies. In a meta-analysis of 598 observations across 129 articles, the authors find that non-physical (vs. physical) goods have significantly larger seller–buyer valuation disparities (i.e., larger endowment effects). This pattern is consistent across non-physical categories, including market and non-market goods. The authors argue the immateriality of non-physical goods reduces evaluability and enhances perceived complexity, leading to greater asymmetries in information processing between sellers and buyers. Congruent with construal level theory, marketing tactics associated withlowcategorization levels (emphasizing product features) influence consumer valuations ofphysicalgoods, but not non-physical goods. Instead, consumer valuations ofnon-physicalgoods are asymmetrically influenced by tactics withhighcategorization levels (accentuating collective identity). This research foreshadows challenges in, and provides managerial implications for, the marketing and transactions of non-physical products.

Keywords

endowment effect, liquid consumption, Metaverse, non-fungible tokens, non-physical goods, peer-to-peer transactions

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