2.9.1 Co-creation Experience and Sharing Economy
As discussed above, the S-D logic contradicts with the G-D logic’s perspective of the separated relationship between customers and service providers, and merges the two parties together (Vargo & Lusch, 2004; 2006; 2008b). Value therefore is no longer independently created by service providers and directly delivered from service providers to customers. Rather, value is co-created and customers take great responsibilities of constructing and determining their own experiences. Meanwhile, being defined as peer- to-peer based activities of obtaining, giving, or sharing of goods and services in
coordinated community-based online services, collaborative consumption pertains to the nature of value co-creation and is also about “togetherness” rather than “separation”.
Because value creation of any economic transaction in SE depends on collective efforts from all parties engaged in the shared network. Most recently, researchers who focus on S-D logic and value co-creation have called for the significant need to examine new types of service experience emerging in the SE which generate inherently co-created
experiences (Jaakkola, Helkkula, & Aarikka-Stenroos, 2015). Particularly, researchers have called for future work to emphasize the experiential or psychological aspect of customers, partial employees (i.e., hosts), and other actors in SE co-creation (Jaakkola, et al., 2015). At the same time, SE scholars have realized that S-D logic and value co- creation may theoretically explain the growing popularity of sharing-economy businesses (Heo, 2016).
The conceptual link between co-creation experience and sharing economy can be further analyzed in three perspectives: the role of customer, the importance of interaction, and how value is created. Firstly, customer as an essential role has been emphasized in both co-creation experience and collaborative consumption. According to Vargo et al.
(2008), value only occurs when a customer makes use of a product or experiences a service, in the context of his or her own life. Therefore, value is co-created and
determined by the customer’s subjective evaluation of the service experience (Grửnroos, 2011; Grửnroos, 2013). Meanwhile, the SE business model allows customers to actively act as resource integrators and facilitators by empowering their efforts and inputs in transaction process and consumption experience (Heo, 2016; Matofska, 2014). For example, people who use peer-to-peer accommodation instead of hotels may have to take the role of partial employees to do value creation activities such as housekeeping and meal preparation.
Secondly, interaction stands as a key characteristic in both co-creation experience and sharing economy. S-D logic highlights the importance of interaction between
consumers and service providers, as this is a strong enabler of co-creation of value (Vargo & Lusch, 2008). Concurrently, People like to participate in collaborative consumption because they want to exchange value by interacting with hosts, as today’s consumers enjoy being active partners in value creation. Social interaction is one of the key drivers that motivate customers to engage in shared consumption (e.g., Tussyadiah, 2015). Consequently, in sharing economy, value is co-created rather than created and delivered by one party because of its interactive nature and central of customer. Take peer-to-peer accommodation for instance, value creation task is proportionately
distributed among different actors in the shared network including guests, hosts, the company, and gust community (Fraiberger & Sundararajan, 2015).
In summary, it is important and urgent to explore co-creation experience in sharing economy as SE experience is inherently considered to be co-created. Associating previously discussed customer values in peer-to-peer accommodation, the next section demonstrates the nomological network proposed by current study, specifically focusing on the rationale of why and how co-creation experience influence cost, experiential and functional values in peer-to-peer accommodation.
2.9.2 Co-creation Experience and Customer Values in Peer-to-Peer Accommodation This section explores the scientific relationships between co-creation experience and customer values in peer-to-peer accommodation as part of the nomological
framework. As indicated by Zikmund, Babin, and Carr (2013), both research proposition and hypothesis can be used to formulate a possible answer to a specific scientific inquiry.
In particular, research proposition deals with the connection between complicated
concepts for which no empirical test is currently available (Bailey, 2008). Because of the exploratory and multi-dimensional nature of the construct of co-creation experience, research propositions are proposed instead of hypotheses in order to demonstrate the potential theoretical relationships.
According to Smith and Colgate (2007), customer cost value refers to the extent to which customers are able to minimize transactional costs involved in the purchase, ownership, and use of a product or service. Collaborative consumption is a consuming model in which economic costs are minimized through customers’ active resource integrations and sharing (Guttentag, 2015). Likewise, human beings are always trying to
minimize control factors in performing specific behaviors or completing particular tasks (Ajzen & Fishbein, 1980). These factors can include both internal control attributes such as personal deficiencies, skills, abilities or emotions, and external constraints such as costs, time, lack of information, and lack of opportunities (Conner & Armitage, 1998).
Economic cost is one of the most influential control factors for tourists (Blazey, 1987;
Coughlan, 1997; Davies & Prentice, 1995; Golledge & Stimson, 1987; Haukeland, 1990;
Hudson & Gilbert, 1998). Similarly, cost-related barrier is found to be ranked as the most widely and intensely experienced travel constraint (Hinch & Jackson 2000). In order to overcome economic constraint, customers demand for consumption experience in which they are able to freely select and determine the choices of the products or service with the right prices they are willing to pay. Co-creation experience offers such experience, especially with its controlled, personalized and autonomous feelings. Co-creation experience allows control factors including cost to be passed off to customers (Fish &
Smith, 2011).
Furthermore, the positive effect of co-creation experience on people’s need for cost-saving can be supported by the literature of the psychology of saving, in which one important factor, self-control, has been long-acknowledged as theoretically significant in forming saving intention (e.g., Canova, Rattazzi, & Webley, 2005; Laibson, Repetto, Tobacman, Hall, Gale, & Akerlof, 1998; Lunt & Livingstone, 1991; Rha, Montalto, &
Hanna, 2006; Wọrneryd, 1989). Serving as the theoretical foundation of controlled, personalized and autonomous co-creation experiences, self-efficacy refers to people’s beliefs about their abilities to implement control over their own level of functioning and over the influences of external events (Bandura, 1991). Self-control, in the meantime, is
the actual psychological and behavioral efforts exerted by human self to control any of their own inner states or responses (Vohs & Baumeister, 2004). Therefore, Bandura (1997) refers self-efficacy as the mental exercise of self-control. Consequently, the conceptual link between self-control and saving supports the positive effect of controlled, personalized, and autonomous co-creation experience on customer cost value in peer-to- peer accommodation. In other words, the degree to which people can minimize the economic cost can be increased if co-creative environment is provided and co-creation experience is generated.
Additionally, literatures have documented that personalized experience provides opportunities for cost-saving. Piller, Moeslein and Stotko (2004) argue that customization can be the source of cost-saving and cost-efficiency potentials along the value chain for firms as it allows firms to (1) postpone some activities until an order is placed, (2) provide more precise information about customers, and (3) increase loyalty by directly interacting with each customer. Consequently, firms are willing and able to lower the price if customization and personalization is realized in the value creation process (Piller et al., 2004). As discussed above, co-creation experience is holds the essence of
personalization as it emphasizes customers’ inputs in constructing their own unique experiences based on specific needs and wants (Prahalad & Ramaswamy, 2004b). In summary, the first research proposition in the nomological framework is proposed as follows:
Research Proposition 1: Co-creation experience positively influences customer cost value in peer-to-peer accommodation.
As discussed above, customer experiential value in peer-to-peer accommodation includes both social-relational value and emotional value. Co-creation creates both aspects of experiential value, particularly with its authentic, connected, and learning experiences. Botsman and Rogers (2010) discuss a transformation in recent years in which today’s generation actively seeks to connect with like-minded people in online and offline communities, which enable them to co-create value in collaborative consumption.
The emerging role of collective co-production and community belongingness has also been emphasized in recent research on co-creative consumption behavior (Nọrvọnen, Kartastenpọọ, & Kuusela, 2013; Peters, Bodkin, & Fitzgerald, 2012). Community enrollment or the desire to be part of a social group or community is contented to be a principle factor of participating in co-creation and collaborative consumption (Ostrom, 1990; Nelson and Rademacher, 2009; Galbreth, Ghosh, & Shor, 2012). Similarly, Albinsson and Perera (2012) argue that customers make use of community gatherings with the purpose to share knowledge and goods for ideological and practical reasons.
Psychologically, a sense of belonging in the co-creation process also acts as a
determinant of those who engage in sharing activities (Albinsson & Perera, 2012). In summary, co-creation experience facilitates social-relational value in peer-to-peer accommodation.
Additionally, individuals tend to enjoy performing participative tasks since such activities are considered to be intrinsically self-motivating, involving and interesting (Csikszentmihalyi, 1975; Füller et al., 2011). In the process of developing creative solutions, co-creators are likely to derive high play value form it by learning and practicing, and therefore regard the experience to be fun and innately enjoyable
(Amabile, 1993; Mathwick & Rigdon, 2004). Furthermore, they may be willing to gain such status of pleasure again by re-experiencing co-creation (Csikszentmihalyi, 1990). As a results, it is argued that intrinsically enjoyable experience leads to increased pleasure value, as well as persistence and interest in participating in co-creation again in future (Füller et al., 2011). Furthermore, Roberts and colleagues find that hedonic reasons such as fun, interest, escapism and passion motivates customers to engage in co-creation (Roberts, Hughes, & Kerbo, 2014). In terms of the learning experience involved in co- creation, people generally enjoy cognitive tasks and thus can generate pleasant feelings from it. Taking the context of virtual co-creation for example, Hoffmand and Novak (2007) find that pleasurable experience can be generated for participants from online cognitive activities such as surfing, conducting Internet searches, or interacting with people in chat rooms. Based on the above discussion, the second research proposition in the nomological framework is proposed as follows:
Research Proposition 2: Co-creation experience positively influences customer experiential value in peer-to-peer accommodation.
Research Proposition 3: Co-creation experience positively influences customer social vale in peer-to-peer accommodation.
Customer functional value in peer-to-peer accommodation refers to the degree to which the shared accommodation experience has desired characteristics, is useful, or performs a desired function or functions. The theoretical link between co-creation experience and functional value is rooted in the concept “value-in-use”. The S-D logic claims that value means value-in-use, which cannot be attained until the customer use the product or service, and of which the customer is always a co-creator (Vargo & Lusch,
2004; Vargo & Lusch, 2008b). Therefore, co-creation experience emphasizes the usage of products or services to produce value. In other words, utilitarian or functional value is crucial for customers who engage in co-creation.
Furthermore, Füller (2010) finds that customers participating in virtual co- creation activities are motivated by its utilitarian benefits from online interactions. A recent study also reveals that both increased utilitarian and hedonic value serve as the goal of co-creation of service recovery (Park & Ha, 2016). Specifically, utilitarian value of co-creation of service recovery depends on a customer’s assessment of how efficient and useful collaborative recovery can be in achieving the customer’s goal (Park & Ha, 2016). In the setting of luxury shopping, Tynan et al. (2010) indicate that value of
obtaining luxury products is co-created by both customers and brands. Consequently, one of the co-created value suggested is functional value which refers the perceived quality excellence and craftsmanship attained in luxury products. Moreover, guests tend to use peer-to-peer accommodation because of utility factors such as convenient location, large space, wide range of amaneties, and authentic local information provided through interacting with hosts (Zervas et al., 2014). In sum, the third research proposition in the nomological framework is proposed as follows:
Research Proposition 4: Co-creation experience positively influences customer functional value in peer-to-peer accommodation.