Justification Effect of Social Capital: An Empirical Analysis of the Game Industry

Abstract

Consumers generally feel guilt when they are purchasing products. Previous studies argue that consumers feel less guilty and justify their consumption more easily when they are purchasing utilitarian products, but hedonic consumption cannot be easily justified. In this study, I argue that there are different types of hedonic products and some of those can be more easily justified than others. I define that there are two types of hedonic products: socializing hedonic product and non-socializing hedonic product. Socializing hedonic product is a hedonic product which improves ones social capital such as a soccer ball, while non-socializing product is a hedonic product which is not related to social capital such as a music album. A person who has higher social capital can gain three main benefits: information, power, and solidarity. Since socializing hedonic products are promoting social capital, a person who purchase a socializing hedonic product generally expect to have those benefits. Although most of hedonic consumptions bring a sense of guilty feeling, socializing hedonic consumption does not cause guilt much because the benefits of social capital justify the consumption.

In this study, I examine the hypothesis that consumption of a product which promotes social capital is more easily justified than consumption of a product which is not related to social capital. To support my hypothesis, I use the data from PC game platform Steam. There are two kinds of games in Steam: multiplayer game and single-player game. Multiplayer game(MPG) is regarded as a socializing hedonic product and single-player game (SPG) as a non-socializing hedonic product. From the analysis, price promotion and price reduction have a stronger positive effect on the sales and popularity of SPG than those of MPG. The result of this study supports that firms should focus on other than price promotion while they are selling socializing hedonic products.