The Limits of Fungibility: Relational Schemata and the Value of Things

A. Peter McGraw, Ohio State University
Philip E. Tetlock, University of California, Berkeley
Orie V. Kristel, The Strategy Team, Ltd.
[ to cite ]:
A. Peter McGraw, Philip E. Tetlock, and Orie V. Kristel (2002) ,"The Limits of Fungibility: Relational Schemata and the Value of Things", in NA - Advances in Consumer Research Volume 29, eds. Susan M. Broniarczyk and Kent Nakamoto, Valdosta, GA : Association for Consumer Research, Pages: 162-163.

Advances in Consumer Research Volume 29, 2002     Pages 162-163

THE LIMITS OF FUNGIBILITY: RELATIONAL SCHEMATA AND THE VALUE OF THINGS

A. Peter McGraw, Ohio State University

Philip E. Tetlock, University of California, Berkeley

Orie V. Kristel, The Strategy Team, Ltd.

Four studies investigate the effect of relational source on object valuations in endowment effect and mental accounting paradigms. Violations of source independence are particularly problematic for economic theories that assume perfect fungibility, or the reduction of all values to a single metric of utility (such as money). To examine the effect of objects that possess social-emotional significance in consumer behavior settings we draw on Fiske’s (1991) analysis of relational schemata, which posits four types of relationships people use to organize, evaluate and coordinate their social interactions:

(1) Communal sharing (CS) slices the social world into emotionally charged classes that allow us to differentiate people into in-groups and out-groups but that do not allow distinctions of degree. Examples include romantic dyads, kinships, or nations states.

(2) Authority ranking (AR) imposes an ordinal ranking on the social world that permits lexical decision rules. One’s location in this ranking scheme (e.g., military ranking) determines one’s relative status in a collective and the prevailing direction of accountability for decision-making.

(3) Equality matching (EM) defines socially meaningful intervals that can be added or subtracted to keep score in social interaction. The social prototype is collegial or friendship networks in which reciprocity is a dominant exchange norm.

(4) Market pricing (MP) makes possible ratio comparisons of the values of diverse entities. This structure underlies capitalism and monetary transactions.

In general, the models differ in their moral significance, social value, and motivational strength, and can be ordered in terms of their emotional and cognitive importance: CS>AR>EM>MP. A sharp qualitative distinction aso exists between MP and the socially meaningful relationships (CS, AR, and EM). In the studies, we also employ Fiske and Tetlock’s (1997) model of taboo trade-offs, which proposes people are cognitively distressed and morally outraged when they are required to assess the value of a socially meaningful relationship using a disparate relational model.

Participants in Study I were presented scenarios that described objects that were acquired from one of the four relational sources. An offer to purchase an object received from a market-pricing relationship was treated as routine. However, when the object was received via communal-sharing, authority-ranking, or equality matching relationships, participants were upset by the offer, tended to refuse to provide selling prices, and if selling prices were given, they were well in excess of the possession’s objective value.

Study II replicated Study I with a more naturalistic design. Participants were asked to call to mind possessions they received from the four relational sources, and imagine an offer was made to buy the object. When the object had been received from a socially meaningful relation, particularly a communal-sharing relationship, participants were confused and outraged by the offer, and gave selling prices several times the objective value of the object. Moreover, participants were less likely to enter their object for sale in an auction. In short, Studies I and II illustrated how considerations of relational source can profoundly moderate the magnitude of the endowment effect.

Study III examined buying prices for potentially meaningful objects in an estate auction. Participants imagined they were bidding for an object that had been previously owned by someone who represented one of the four relational types. Participants spent more money and were more likely to use an additional mental account (by spending future earnings) when the relationship symbolized communal-sharing, authority-ranking, and equality-matching relationships.

Study IV further investigated the role of relational source on mental accounting and spending behavior. Participants imagined they received a windfall sum of money via one of the four relational sources. The dependent variable was the respondents’ choice either to purchase a purely market-priced item or to save the money. The relational source moderated the tendency to spend the windfall. The money was more likely to be saved than spentBas windfalls typically areBas the source moved from market pricing to communal sharing. Oxymoronic though it sounds, even money is not always fungible.

The four studies provide support for a social-relational perspective on selling and buying behavior. The results indicated that people draw a distinction between "particularlistic" (CS, AR, EM) and "universalistic" (MP) relationshipsBthat is, relationships in which people care very much about the identities of the actors from whom they receive goods and services and relationships in which people are indifferent to the identity of the actors (cf. Foa and Foa, 1974; Bringberg and Wood, 1983). Studies I and II revealed increases in distress when people were asked to sell objects from communal-sharing, authority-ranking, and equality-matching relationships, and that stress manifested itself in higher selling prices and reluctance to cooperate with the purchase offer. Studies III and IV demonstrate the role of relational source on people in their more customary role as consumers making choices. In both studies, symbolic meaning and relational expectations played important roles in shaping mental accounting and ultimate purchasing decisions.

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