IDEAS home Printed from https://ideas.repec.org/a/inm/orisre/v26y2015i4p859-870.html
   My bibliography  Save this article

Research Note—Can’t Buy Me Love…Or Can I? Social Capital Attainment Through Conspicuous Consumption in Virtual Environments

Author

Listed:
  • Oliver Hinz

    (Faculty of Law and Business, TU Darmstadt, 64289 Darmstadt, Germany)

  • Martin Spann

    (Munich School of Management, Ludwig-Maximilians-University Munich, 80539 Munich, Germany)

  • Il-Horn Hann

    (Robert H. Smith School of Business, University of Maryland, College Park, Maryland 20742)

Abstract

Conspicuous consumption affects anyone who cares about social status; it has intrigued sociologists and economists for more than 100 years. The idea that conspicuous consumption can increase social status, as a form of social capital, has been broadly accepted, yet researchers have not been able to test this effect empirically. In this work, we provide empirical evidence by analyzing the digital footprints of purchases and social interactions in different virtual worlds. We use a multimethod approach, such that we both analyze transactional data and conduct a randomized field experiment. Virtual worlds, as artificial laboratories, offer the opportunity to analyze the social capital of their inhabitants, subsequent to their purchase of virtual prestige goods, which provides a means to empirically test hypotheses that would be nearly impossible to test in real-world settings. Our results are consistent with the notion that conspicuous consumption represents an investment in social capital.

Suggested Citation

  • Oliver Hinz & Martin Spann & Il-Horn Hann, 2015. "Research Note—Can’t Buy Me Love…Or Can I? Social Capital Attainment Through Conspicuous Consumption in Virtual Environments," Information Systems Research, INFORMS, vol. 26(4), pages 859-870, December.
    • Handle: RePEc:inm:orisre:v:26:y:2015:i:4:p:859-870
    DOI: 10.1287/isre.2015.0596
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/isre.2015.0596
    Download Restriction: no
    File URL: https://libkey.io/10.1287/isre.2015.0596?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. John McMillan & Christopher Woodruff, 1999. "Interfirm Relationships and Informal Credit in Vietnam," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(4), pages 1285-1320.
    2. Gal Oestreicher-Singer & Arun Sundararajan, 2012. "The Visible Hand? Demand Effects of Recommendation Networks in Electronic Markets," Management Science, INFORMS, vol. 58(11), pages 1963-1981, November.
    3. Richard A. D'Aveni & Idalene F. Kesner, 1993. "Top Managerial Prestige, Power and Tender Offer Response: A Study of Elite Social Networks and Target Firm Cooperation during Takeovers," Organization Science, INFORMS, vol. 4(2), pages 123-151, May.
    4. Ravi Bapna & Akhmed Umyarov, 2015. "Do Your Online Friends Make You Pay? A Randomized Field Experiment on Peer Influence in Online Social Networks," Management Science, INFORMS, vol. 61(8), pages 1902-1920, August.
    5. Corneo, Giacomo & Jeanne, Olivier, 1997. "Conspicuous consumption, snobbism and conformism," Journal of Public Economics, Elsevier, vol. 66(1), pages 55-71, October.
    6. Braun, Ottmar L. & Wicklund, Robert A., 1989. "Psychological antecedents of conspicuous consumption," Journal of Economic Psychology, Elsevier, vol. 10(2), pages 161-187, June.
    7. Bagwell, Laurie Simon & Bernheim, B Douglas, 1996. "Veblen Effects in a Theory of Conspicuous Consumption," American Economic Review, American Economic Association, vol. 86(3), pages 349-373, June.
    8. Lorin M. Hitt & Frances X. Frei, 2002. "Do Better Customers Utilize Electronic Distribution Channels? The Case of PC Banking," Management Science, INFORMS, vol. 48(6), pages 732-748, June.
    9. Wilfred Amaldoss & Sanjay Jain, 2005. "Conspicuous Consumption and Sophisticated Thinking," Management Science, INFORMS, vol. 51(10), pages 1449-1466, October.
    10. Belk, Russell W, 1988. "Possessions and the Extended Self," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 15(2), pages 139-168, September.
    11. Hinz, Oliver & Skiera, Bernd & Barrot, Christian & Becker, Jan, 2011. "Seeding Strategies for Viral Marketing: An Empirical Comparison," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 56543, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    12. Xavier Drèze & Joseph C. Nunes, 2009. "Feeling Superior: The Impact of Loyalty Program Structure on Consumers' Perceptions of Status," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 35(6), pages 890-905, April.
    13. Gene M. Grossman & Carl Shapiro, 1988. "Foreign Counterfeiting of Status Goods," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 103(1), pages 79-100.
    14. Oliver Hinz & Martin Spann, 2008. "The Impact of Information Diffusion on Bidding Behavior in Secret Reserve Price Auctions," Information Systems Research, INFORMS, vol. 19(3), pages 351-368, September.
    15. Gary S. Becker & Kevin M. Murphy & Ivan Werning, 2005. "The Equilibrium Distribution of Income and the Market for Status," Journal of Political Economy, University of Chicago Press, vol. 113(2), pages 282-310, April.
    16. Roger Mason, 2000. "Conspicuous consumption and the positional economy: policy and prescription since 1970," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 21(3-4), pages 123-132.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sebastian Voigt & Oliver Hinz, 2017. "Assessing the economic effects of server launches in free-to-play MMO games," Journal of Business Economics, Springer, vol. 87(4), pages 421-464, May.
    2. Irina Heimbach & Oliver Hinz, 2018. "The Impact of Sharing Mechanism Design on Content Sharing in Online Social Networks," Information Systems Research, INFORMS, vol. 29(3), pages 592-611, September.
    3. Che-Wei Liu & Guodong (Gordon) Gao & Ritu Agarwal, 2019. "Unraveling the “Social” in Social Norms: The Conditioning Effect of User Connectivity," Information Systems Research, INFORMS, vol. 30(4), pages 1272-1295, April.
    4. Wil M. P. Aalst & Jörg Becker & Martin Bichler & Hans Ulrich Buhl & Jens Dibbern & Ulrich Frank & Ulrich Hasenkamp & Armin Heinzl & Oliver Hinz & Kai-Lung Hui & Matthias Jarke & Dimitris Karagiannis &, 2018. "Views on the Past, Present, and Future of Business and Information Systems Engineering," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 60(6), pages 443-477, December.
    5. Michael Weiler & Oliver Hinz, 2019. "Without each other, we have nothing: a state-of-the-art analysis on how to operationalize social capital," Review of Managerial Science, Springer, vol. 13(5), pages 1003-1035, November.
    6. Yue Yuan & Mary E. Deily & Yuliang Yao, 2022. "Willingness to Pay for Status Signals in Online Luxury Markets," Production and Operations Management, Production and Operations Management Society, vol. 31(2), pages 668-680, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gurzki, Hannes & Woisetschläger, David M., 2017. "Mapping the luxury research landscape: A bibliometric citation analysis," Journal of Business Research, Elsevier, vol. 77(C), pages 147-166.
    2. Truong, Yann & McColl, Rod, 2011. "Intrinsic motivations, self-esteem, and luxury goods consumption," Journal of Retailing and Consumer Services, Elsevier, vol. 18(6), pages 555-561.
    3. Gierl, Heribert & Huettl, Verena, 2010. "Are scarce products always more attractive? The interaction of different types of scarcity signals with products' suitability for conspicuous consumption," International Journal of Research in Marketing, Elsevier, vol. 27(3), pages 225-235.
    4. Kastanakis, Minas N. & Balabanis, George, 2012. "Between the mass and the class: Antecedents of the “bandwagon” luxury consumption behavior," Journal of Business Research, Elsevier, vol. 65(10), pages 1399-1407.
    5. Krista J. Li & Jianqiang Zhang & Richard Schaefer, 2022. "Parallel imports of status goods: A strategic analysis of aesthetic design," Production and Operations Management, Production and Operations Management Society, vol. 31(5), pages 2268-2288, May.
    6. Luke Butcher & Ian Phau & Min Teah, 2016. "Brand prominence in luxury consumption: Will emotional value adjudicate our longing for status?," Journal of Brand Management, Palgrave Macmillan, vol. 23(6), pages 701-715, November.
    7. Raghunath Singh Rao & Richard Schaefer, 2013. "Conspicuous Consumption and Dynamic Pricing," Marketing Science, INFORMS, vol. 32(5), pages 786-804, September.
    8. Giovanni B. Ramello, 2006. "What'S In A Sign ? Trademark Law And Economic Theory," Journal of Economic Surveys, Wiley Blackwell, vol. 20(4), pages 547-565, September.
    9. Chailan, Claude, 2018. "Art as a means to recreate luxury brands' rarity and value," Journal of Business Research, Elsevier, vol. 85(C), pages 414-423.
    10. Chapman, Alexis & Dilmperi, Athina, 2022. "Luxury brand value co-creation with online brand communities in the service encounter," Journal of Business Research, Elsevier, vol. 144(C), pages 902-921.
    11. Shan Huang & Sinan Aral & Yu Jeffrey Hu & Erik Brynjolfsson, 2020. "Social Advertising Effectiveness Across Products: A Large-Scale Field Experiment," Marketing Science, INFORMS, vol. 39(6), pages 1142-1165, November.
    12. Shen, Bin & Qian, Rongrong & Choi, Tsan-Ming, 2017. "Selling luxury fashion online with social influences considerations: Demand changes and supply chain coordination," International Journal of Production Economics, Elsevier, vol. 185(C), pages 89-99.
    13. Wilfred Amaldoss & Sanjay Jain, 2002. "An Analysis of the Impact of Social Factors on Purchase Behavior," Review of Marketing Science Working Papers 2-1-1021, Berkeley Electronic Press.
    14. Sebald, Alexander & Vikander, Nick, 2019. "Optimal firm behavior with consumer social image concerns and asymmetric information," Journal of Economic Behavior & Organization, Elsevier, vol. 167(C), pages 311-330.
    15. Aslıhan KIYMALIOĞLU & Eyyüp YARAŞ & Duygu AYDIN ÜNAL, 2018. "Keeping up with the Joneses – the Effect of Individual Cultural Values on Conspicuous Consumption," Istanbul Business Research, Istanbul University Business School, vol. 47(1), pages 88-100, May.
    16. Frank Scott & Aaron Yelowitz, 2010. "Pricing Anomalies In The Market For Diamonds: Evidence Of Conformist Behavior," Economic Inquiry, Western Economic Association International, vol. 48(2), pages 353-368, April.
    17. Krähmer, Daniel, 2005. "Advertising and Conspicuous Consumption," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 72, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    18. Necati Tereyagoglu & Senthil Veeraraghavan, 2012. "Selling to Conspicuous Consumers: Pricing, Production, and Sourcing Decisions," Management Science, INFORMS, vol. 58(12), pages 2168-2189, December.
    19. Jellal, Mohamed, 2014. "Diaspora transferts et signal de richesse [Diaspora remittances and signaling wealth game]," MPRA Paper 57356, University Library of Munich, Germany.
    20. Chang Hwan Lee & Tsan‐Ming Choi & T. C. Edwin Cheng, 2021. "Operations strategies with snobbish and strategic consumers," Naval Research Logistics (NRL), John Wiley & Sons, vol. 68(3), pages 327-343, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:orisre:v:26:y:2015:i:4:p:859-870. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.