Affording Disposal Control: The Effect of Circular Take-Back Programs on Psychological Ownership and Valuation

Abstract

A circular economy is a “closed-loop” system designed so that products flow back into the production cycle after use. With many companies implementing take-back programs as part of their sustainability strategy, a fundamental shift in consumption has occurred, with consumers considering disposal during and even before purchase decision making. Eight experiments reveal that consumers indicate a greater willingness to pay for circular program products. An increase in psychological ownership underlies the difference in product valuation. Specifically, the additional disposal control uniquely afforded by circular products increases the capacity of circular take-back program products to evoke psychological ownership. The process explanation is directly tested through mediation. Experimentally manipulating antecedents of psychological ownership (i.e., disposal control and psychological ownership) provides further support for the conceptual framework.