New shops open every day on peer-to-peer marketplaces, with people selling anything from handcrafted jewelry to small furniture. Researchers Anna Paley and Robert Smith of the Tilburg School of Economics and Management (TiSEM) suspected that many sellers enjoy making the things they offer online. "After all, enjoyment is often a key part of people’s lives, including their work lives," Paley says.
Production enjoyment rarely mentioned
But sellers don’t say much about their production enjoyment in their bios and product descriptions. "We were surprised to find that sellers rarely mention it in their messaging. For example, in the profiles of 30,000 sellers across various peer-to-peer marketplaces, only about 1% of sellers mentioned production enjoyment."To investigate the impact of production enjoyment in online marketplaces, Anna Paley and Robert Smith teamed up with researchers form the U.S. and ran over 15 experiments. The results, which have just been published by the Journal of Marketing, are striking: "We found consistent evidence that buyers are more interested in, are more likely to choose, and are willing to pay more for products or services that the seller enjoys producing."
Brownie experiment
"For example, in a field experiment, we set up a table at a fair and had passersby choose one of two brownies-whichever one they would pay more for. They then actually received the brownie," Smith explains. "We found that people were willing to pay more for the brownie that the chef said they really enjoy making, even compared to a brownie that the chef said is very popular."In addition to brownies, the researchers found the same effects in other contexts. Communicating production enjoyment works best when the production process requires a lot of skill. "Automation has made many production processes a lot easier. In situations where buyers assume the production process is largely automated, or if it doesn’t require much skill overall, production enjoyment does not impact buyers nearly as much."
Higher enjoyment, lower prices
Even though buyers are willing to pay more for them, sellers are inclined to charge less money for products and services they enjoy producing. "In other words, people who enjoy their work seem to be selling themselves short," Paley explains.It’s still an open question why exactly sellers tend to charge less for things they enjoy producing. Like buyers, sellers also associate production enjoyment with high quality products and services. However, it might be that sellers instead lower their prices because the joy that they experience during the production process already compensates them for their work.
Business lessons
For people running a small business, the research holds a few valuable lessons. Sellers might charge too little for the products they enjoy making. And, most importantly: "If you enjoy the work you do, make sure you tell people that. They will think you do better work and should be willing to pay you more to do it."Robert Smith
Associate Professor of Marketing, Tilburg School of Economics and Management (TiSEM)Robert Smith is an Associate Professor of Marketing at Tilburg University. His research aims to answer questions like, how can we increase people’s enjoyment of the things they consume, how can we encourage people to consume more sustainably and donate more, and how do people make sense of themselves and the marketplace.
Anna Paley
Assistant Professor of Marketing, Tilburg School of Economics and Management (TiSEM)Anna Paley is an Assistant Professor of Marketing at Tilburg University. Her work examines various aspects of consumer decision making. Most broadly, her work focuses on exploring ways in which people can make better decisions regarding their finances, health, and wellbeing.
