When and Why Consumers Are “Accidently” Careless with Products They Own
Abstract
Owners of products sometimes face the launch of a new product that is superior to theirs in its non-functional aspects (e.g., design), but is not much different in its functional aspects. The results of a field study and three lab studiesshow that in such cases, consumers may act carelessly with their owned product. We findevidence ofconsumers taking less care of an owned product and even actively endangering it.We argue that both forms of careless behaviorresult from consumers’ difficulty injustifyingpurchasing thenew product,and the “fortuitous” damage their owned product may incurfrom such careless behaviors “frees” them to purchase the new product.Supporting this claim,this research shows careless behaviordoes not occur when the new product is functionally superior to consumers’ owned product (and thus its purchase is easy to justify),when the owned product is under warranty and therefore will be replaced if broken,and is more likely to occur when consumer concerns about justifying a purchase are strengthened.
Introduction
Many companies strategically churn out new versions of existing products. For example, from 2007 to 2017, Apple launched 15new iPhones, while Canon released 10 new versions of the EOS Rebel camera. How do these new product launches influence the behavior of consumers toward the older versions they own? In this research,we show the answer depends on whether consumers want the new product yet have difficulty justifying itspurchase. We focus on a specific case in which justification may be an issue—when the new product offers non-functional improvements (e.g., design), but whose functional aspects differ little from its predecessors’. We find that when justification is difficult, consumers maytreat their product carelessly,increasing the likelihood of damaging it. This fortuitous damage “frees” them to purchase the new product.We demonstrate this careless behavior—when consumers are made aware of the launch of a new product whose purchase is hard to justify (offers non-functional improvements)—both in the field and in the lab. In the field, we observe a byproduct of careless behavior (i.e.,actual damaged products),and in the lab, we demonstrate that consumers show increased interest in participatingin activities that may causedamage to their owned product.
We show justification plays an important role in this careless behavior in two ways. First, we show that careless behavior is more likely to occur when the new product improves on existing products in design rather than functionality. For example, we use onlinesale listings of second-hand iPhones to show that (a) when Apple introduced a new iPhone that differed from its predecessor only in color (a non-functional, design feature),a non-proportional increase occurred in the listings of iPhones described as “For parts or not working,” but (b) when a new iPhone differed from its predecessor in functional, technological features, no such increase occurred.Second, in the lab, we show this careless behavior intensifies when justification considerations aremade salient and accessible.
Previous studies and theoretical considerations
Shani and Shachar (2011) initially demonstrated the idea that individuals may treatan ownedproduct carelessly when made aware of a new product. They provided support for this idea in a lab experiment in which participants received a basicversion of a shot glass they were asked to position on the highest point of a metal rail from which it would then be dropped. All participants knew a-priori that they couldpurchase another basic version of the glass in order to complete a set of two basic shot glasses. Critically, some of the participantswere given an additional option of being able to purchase a pair of premiumshot glasses. The authors hypothesized that individuals would be more likely to risk the basic glass they were endowed with,by placing it higher on the metal rail in the “premium condition” than in the “basic condition,”the logic being that “buying such a pair [premium], given that one already has a basic glass (and can complete a set at low cost), is often perceived as a wasteful behavior (Arkes, 1996). Thus, while some participants had an incentive to engage in a behavior that might appear wasteful, others haven’t (p. 3 in Shani and Shachar 2011).”Put differently, the authors arguedparticipants in the premium condition would find risking the glass attractive becausea broken glass could free them from concerns about wastefulness. As expected, participants endangered their basic glass more (by placing it higheron the metal rail) in the “premium condition” than in the “basic condition.”
Recently, Bellezza et al. (2017) provided further support for this idea in a series of studies that included one study with a setting similar to that of Shani and Shachar (2011), namely, replacing shot glasses with mugs and a metal rail with the game Jenga. Importantly, in Bellezza et al.’s other studies, individuals did not place their products at risk of being damaged. The authors describe the rationale for this approach by distinguishing between “passive omission behavior (e.g., carrying a phone without a protective case)” and “more active commission acts (e.g., causing damage by dropping or handling the product roughly).” They argue, “We would expect that omission is more common than commission behavior. (p. 781)” Bellezza et al. (2017) go beyond documenting careless behavior and provide some evidence ofits source. Usinghypothetical scenarios,they show that providing consumers with a justification for the upgrade (e.g., the current product will be given to a person you care about) canmoderate the tendency for passive omission behavior among individuals who score high on the lay-rationalism scale(Study 4).
Our study also focuses on the role of justification and the concern about looking wasteful. Indeed, concerns about appearing wasteful aredeeply rooted in humans. For example, Bolton and Alba (2012) stress the role of the experience of deprivationin leading to this concern.Accordingly, this concern is coupled with feeling guilty when making a choice that is not well justified (Okada 2005;Keinan, Kivetz and Netzer 2016). One case where individuals may experience wastefulness and guilt is when choosing a hedonic product over a utilitarian product. As Okada (2005) points out: “People try to construct reasons for justification (Shafir, Simonson, and Tversky 1993), and it is easier to construct reasons for utilitarian consumption than for hedonic consumption. (p. 44)”. Hsee (1995) provides support for this idea by showing that individuals believe selectinga tempting option that is superior on a factor not central to the accomplishment of a given task over an option that is superior on a factor directly related to the task is unjustifiable.To avoid guilt in such cases, individuals “are willing to pay more in time for hedonic goods and more in money for utilitarian goods” (p. 43 in Okada 2005), andthey overvalue small utilitarian features of a luxury product that can serve as a “functional alibi” (Keinan, Kivetz, and Netzer 2016).
The hedonic-utilitariandistinction is relevant also for the case at hand. It implies that when consumers face a new product that is functionally better than the one they own, purchasing it is less likely to stimulate the experience of wastefulness and guilt than when a new product is better in a non-functional way. Accordingly, we expect to find consumers will act more carelessly with an owned product when theyface a new product that is better than theirs in a non-functional way than when the new product is better in a functional way. Note our distinction is not between hedonic and utilitarian products in general. Instead, we focus on the functionalityaspect highlighted by Keinan, Kivetz, and Netzer (2016) and use it to identify the role of justification in careless behavior toward owned products.
Accordingly, in all our studies, we examine careless behavior in two different conditions:when the new product is functionally better than existing products and when the new productis non-functionally better.[1]This comparison is also helpful for refuting a perceptual devaluation account of our findings. When a new product is introduced, consumers may perceptually devalue their owned product because it is inferior relative to the new product. This perceptual devaluation can lead owners to act carelessly with their owned product (because of its drop in value) and should be stronger when the new product offers functional benefits than when it offers non-functional benefits. Indeed, we find owners value a new product more when it offers functional relative to non-functional improvements. However, we find owners act more carelessly with their owned product following the introduction of a new product that offers non-functional improvements relative to functional improvements. Thus, perceived devaluation cannot explain our findings. Rather, it seems the introduction of a new product offering non-functional improvements prompts owners to act carelessly with their owned product in the ‘hope’ it will get damaged, so they will have justification to purchase the new product.
Our studies and their contribution
Our studies examine the careless behavior ofiPhone owners facing the launch of a new iPhone.The comparison between functional and non-functional improvements boils down to technological advances versus design enhancement. In Study 1,we compare consumers’ careless behavior when Apple introduced the new iPhone 4 in white, differing from its predecessor, the iPhone 4, only in its color (a design feature: white instead of black),with their behavior when the iPhone 4S was launched. Critically, whereasthe white iPhone 4 and the black iPhone 4were identical infunctionality, the iPhone 4S offered many functional improvements over both the black and white iPhone 4’s.
Consistent with our theorizing, we find evidence for consumers’careless behavior toward their iPhone 4 when the white iPhone was launched,but not when the iPhone 4Swas launched. Specifically, we find a significant increase in the ratio between “damaged iPhone 4 for sale” (i.e., iPhones described as “For parts or not working”) and “used iPhone 4 for sale” when the white iPhone was introduced, but not when the iPhone 4S wasintroduced.
In Study 2, we examine in a controlled lab setting whether consumers are more likely to risk their iPhone after being made aware of a new iPhone offering a non-functional improvement than after being made aware of a new iPhone offering a functional improvement. We were primarily interested in iPhone owners without a warranty, because damaging an iPhone that is not under warranty “frees” the consumer to purchase a new iPhone. By contrast, damaging an iPhone that is under warranty does not “free” the consumer to purchase a new phone (i.e., the phone can be fixed at no cost). Consistentwith the field data, we find consumers were more willing to risk damage to their iPhone (take it on a scenic outdoor trek full of water crossings where it could get damaged) after being exposed to the launch of an iPhone that offered non-functional improvements, but only if their iPhone was not under warranty.
Next, in Studies 3a and 3b, we demonstratethe role of justification in the carelessness phenomenon in yet another way. In Study 3a, we manipulate justification considerations before participants were made aware of the newiPhone 8 that (purportedly) would mainly offer non-functional, design improvements, whereas in Study 3b, we manipulate justification considerations before participants were made aware of the new iPhone 8 that (purportedly) would mainly offer functional, technological improvements.In both studies, we used a new measure of carelessbehavior. Specifically, we offered all participants the opportunity to purchase up to 10 raffle tickets (at 1 US cent per ticket, taken from their $1 participation fee) to increase the likelihood they would be chosen to participate in a pre-launch event that involvedtossing their iPhone at a balloon floating at a height of about 10 feet. If they were to hit the balloon, they would receive a significant discount on the new iPhone 8.
Consistent with our theorizing, in Study 3a, in which the new product purportedly primarily offered non-functional improvements, we find participants purchased significantly more raffle tickets when justification considerations were made salientrelative to when they were not, but only if their iPhone was not under warranty in which case they would have to replace it, if it was damaged. We contend that becausecareless behavior is due to justification concerns, intensifying such concerns increases careless behavior. By contrast, in Study 3b, in which the new product purportedly primarily offered functional improvements, we find participants purchased a similar number of raffle tickets in the justification and no-justification conditions. We contend participants do not have difficulty justifying the purchase of a new product that offers primarily functional improvementsover an owned product.
To summarize, we believe our findings contribute significantly to understanding the effects of new product introductions on consumer behavior. First, we find consumers may go beyond “carrying a phone without a protective case,” and in fact may be willing to proactively endanger their product.Second,we find careless behavior happens when the new product offers non-functional improvements, but not when it offers functional improvements. Third, our findings provide evidence that consumers may act carelessly with their phone (place it in danger) to address need-for-justification concerns.
Study 1: Careless behavior in the field
In 2011, Apple introduced two new iPhones: a white version of iPhone 4 in April and the iPhone 4S in October. These two launches present a unique opportunity to examine the hypothesis that careless behavior occurs when a new product offers improvements on non-functional attributes, but not when it offers improvementson functional attributes. Specifically, the white iPhone was functionally the same as the iPhone 4, whereasthe iPhone 4S was functionally superior to its predecessor. Based on our hypothesis, we expect to find traces of careless behavior when the white iPhone was launched but not when the iPhone 4Swas launched.
We start by providing more details on these iPhones. When iPhone 4 was launched on June 24, 2010, Apple offered it only in black. On April 27, 2011, Apple announced the launch of the white iPhone 4, which was made available for purchase one day later on April 28, 2011. This model was virtually identical to the black iPhone 4, except it was offered in white (see Figure 1). As one reporter wrote, “There's nothing special about it except that it's white. No new features, no more storage space—aside from the color of its case and home button, the white iPhone 4 will be exactly the same as the black iPhone 4” (Jackson, 2011). Apple’s own press release said, “The white iPhone 4 has finally arrived and it’s beautiful” (Harrison and Kerris, 2011).
On the other hand, the iPhone 4S, which was announced on October 4of that year and was launched on October 14, was identical in its appearance to the original iPhone 4 yet was functionally superior—it was a faster device with new and innovative features (e.g., digital personal assistant, superior camera and memory; GSMArena, 2011).
Figure 1. iPhone 4 versions offered in black and white
Measuring careless behavior
Used and even damaged phones have a market. To examine our hypothesis, we scraped the data on all of the listings of iPhones offered for sale in the United States from a large e-commerce website. The data were collected between January 1, 2011, and December 31, 2011, at a daily level. On this e-commerce website, when customers listed an item for sale, they had to indicate their asking price for the phone and the status of the item from a multi-option list (see Figure 2).
Figure 2: Item-condition options for listed items on the platform
For our analysis, we do not consider new or refurbished phones,because we are interested only in phones consumers actually used. We create two categories: “used” and “damaged.” The “damaged” category included all phones listed with the item condition of “For parts or not working” (i.e., non-functioning or physically broken phones). To confirm this classification, we sampled the text listings for these items. Many of them specified broken screens and a nonworking condition. None of them advertised that a phone was in working condition. Our data include 412,402 phones: 382,036 used and 30,366 damaged.
Hypothesis specification
Because the white iPhone is functionally identical to its black predecessor, replacing one with the other would have been hard to justify and was likely to raise concerns of wastefulness. Thus, we expect to find an increase in careless behavior,signified by an increase in the proportion of damaged iPhones listed for sale (in comparison to used phones listed for sale). Accordingly:
H1: Following the introduction of the white iPhone 4, we expect to see an increase in the number of damaged relative to used iPhone 4’soffered for sale, compared to the listings before the introduction of the white iPhone 4.
On the other hand, because the iPhone 4S is functionally superior to the iPhone 4,we do not expect consumers to have been concerned with justification and wastefulness issues. Thus, those who wished to replace their iPhone 4 with the 4S model were likely to sell it as “used.” Accordingly:
H2: Following the introduction of the iPhone 4S, we expect to see an increase in the number of used relative to damaged iPhone 4’soffered for sale, compared to the listings before the introduction of the iPhone 4S.
Figure 3 provides some preliminary support for these hypotheses. It presents the standardized time series for damaged and used iPhone 4 models listed in 2011 (damaged listings in gray and used listings in black). The figure reveals two opposing trends: whereas the introduction of the white iPhone 4 in April seems to have mostly affected the damaged listings, the introduction of the iPhone 4S in October seems to have mostly affected the used listings of the iPhone 4. Note the figure also shows a dip in listings over weekends, which we account for in our formal analysis. Next, we specify the formal method we use to test our hypotheses.