Is cash perceived as more valuable than digital money? The mediating effect of psychological ownership and psychological distance

Zhou, Kun; Ye, Jun; Xiao-xiao, Liu

doi:10.1007/s11002-022-09624-9

Cited by 10 publications

(15 citation statements)

References 28 publications

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“…Thus, in this experiment, we asked non‐crypto users to work for Bitcoin. This intervention draws from research showing that (1) consumers feel differential ownership over different forms of currency (they tend to feel more ownership over cash than digital money; Zhou et al, 2022) and (2) familiarity is an antecedent of psychological ownership (consumers feel more ownership over goods they are familiar with; Pierce et al, 2003). We expected that when consumers exerted effort to earn a digital currency that they were unfamiliar with, they would feel less psychological ownership over these earnings and be more tolerant of risking them, compared to when they exerted effort to earn a familiar currency.…”

Section: Methodsmentioning

confidence: 99%

“…Recent research shows that consumers can perceive a sense of ownership over their money just like they do with physical goods (De La Rosa et al, 2021; Shu, 2018). Psychological ownership over money is affected by money's modality (Zhou et al, 2022) and framing (Sharma et al, 2021). Although an effort–ownership relationship has not been tested for money, a positive effort–ownership relationship has been documented for objects and ideas (Peck & Luangrath, 2023; Pierce et al, 2003).…”

Section: Introductionmentioning

confidence: 99%

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Working hard for money decreases risk tolerance

et al. 2023

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This research examines how the effort that consumers exert to earn money affects their risk tolerance. We theorize and find that working harder—that is, more effortful earning—increases perceived ownership and valuation of earnings, and thus aversion to losing them, resulting in lower risk tolerance, even when risk is associated with better expected outcomes. Documenting this causal negative effort–risk relationship is important because it (1) runs contrary to consumers' lay beliefs and population‐level analysis which conversely suggest a positive effort–risk correlation (i.e., a Simpson's paradox, Experiment 2), (2) expands understanding of how the way in which people acquire money affects risk tolerance beyond classic research on windfall gains (i.e., unanticipated rewards) and house money (i.e., unrealized gains), and hence (3) reveals a unique mechanism of perceived ownership that drives this negative causal relationship. Leveraging this unique mechanism, we further show that this negative effort–risk relationship can be attenuated by changing the currency of the money that consumers earn to be one that consumers have low ownership over (e.g., Bitcoin for non‐crypto users).

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Section: Methodsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Working hard for money decreases risk tolerance

et al. 2023

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“…Whereas, the greater tangibility associated with cash, e.g. being able to hold it (Zhou et al, 2022), means paying with it leaves a more intense memory, and given its instantaneous effect, it is more painful. Hence, unlike cash, credit card payments involve little mechanism interaction, as the dominance of contactless technology only requires users to swipe or tap and, usually, repayment is not immediate (Zainudin et al, 2019) and is obscured "… by combing multiple distinct purchases on a single bill" (Gafeeva et al, 2018, 63).…”

Section: Pain Of Payment and Payment Transparencymentioning

confidence: 99%

“…It is argued, given the lowest physical form and amount salience, that electronic and mobile payments have limited transparency (Liu and Chou, 2020). Whereas the greater tangibility associated with cash, for example, being able to hold it (Zhou et al, 2022), means paying with it leaves a more intense memory, and given its instantaneous effect, it is more painful. Hence, unlike cash, credit card payments involve little mechanism interaction, as the dominance of contactless technology only requires users to swipe or tap, and, usually, repayment is not immediate (Zainudin et al, 2019) and is obscured ".…”

Section: Consumer Attitudesmentioning

confidence: 99%

Understanding the psychological determinants of buy-now-pay-later (BNPL) in the UK: a user perspective

Relja

Ward

Zhao

2023

IJBM

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PurposeThis study explores the psychological determinants of buy-now-pay-later (BNPL) use in the UK and reviews the efficacy of existing payment constructs.Design/methodology/approachA total of 533 BNPL users engaged in story stem completion. Template analysis was used, supported by the identification of four BNPL sentiment groups to enable comparison.FindingsWhilst positive attitudes towards BNPL dominate, other psychological determinants are apparent to a varied extent. Psychological distance and ownership of borrowed money are redolent, while transparency and transaction convenience are less appreciable. BNPL users understand temporality beyond its current conceptualizations. Some users construe BNPL as a “savings” product, and hence payment format conceptualizations may be erroneous. Those with a positive sentiment foreground BNPL’s consumption and budget management benefits. However, the potential for unintended consequences is manifest across all users.Research limitations/implicationsThe potentially unwanted consequences, or dark side, of BNPL use in the UK are highlighted. The specified constructs, whilst helpful, do not particularize the complex interconnected nature of the psychological determinants of BNPL use. Improved conceptualization offering richness and clarity is needed – temporality specifically requires consideration.Practical implicationsUsers’ sophistication and misunderstanding are both evident, necessitating fuller conversations among various stakeholders, including, providers, policymakers, consumers and advocacy groups.Originality/valueThis research advances the scarce literature exploring consumers’ BNPL use determinants and challenges current conceptualizations surrounding payment format perceptions.

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“…Other research has found that physical money like cash induces higher levels of PO of that money compared to digital money, resulting in higher perceived purchasing power (Zhou et al, 2022). It is driven by an underestimation of perceived purchasing power of digital money since it feels less like it is one's own.…”

Section: Characteristics Of the Target Of Ownershipmentioning

confidence: 99%

A review and future avenues for psychological ownership in consumer research

Peck

Luangrath

2022

Consumer Psychology Review

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Research on psychological ownership is prevalent in the consumer domain. This article details the theoretical core of psychological ownership, integrating research in consumer psychology and marketing. The underlying motivations behind psychological ownership are also considered as well as the antecedents and consequences of feeling ownership. This article discusses how consumers signal and infer a sense of ownership, acknowledging that the characteristics of the target of ownership vary greatly to include physical targets as well as those that are intangible. Research is discussed on the lifecycle of ownership considering the formation, perception, and eventual dissolution of psychological ownership. The authors note various avenues for future research in psychological ownership with the aim to spur research in consumer psychology and feelings of ownership.

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Is cash perceived as more valuable than digital money? The mediating effect of psychological ownership and psychological distance

Cited by 10 publications

References 28 publications

Working hard for money decreases risk tolerance

Working hard for money decreases risk tolerance

Understanding the psychological determinants of buy-now-pay-later (BNPL) in the UK: a user perspective

A review and future avenues for psychological ownership in consumer research

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