Why People Buy What They Know They Won't Use

May 07, 2015    |    My Money MD    |   Shirley Mueller, MD

A collector friend of mine in her eighties said, “We have to get that goblet to complete the set.” Her passion, resolve and determination were evident in her voice. Her goal is to match antique glassware to complete a set, for example, 6 instead of 5 or 8 rather than 7.

As a fellow collector, this makes sense to me. I do the same, but with unmatched Chinese teapots meant to demonstrate different shapes and patterns over 2 centuries. Our shared passion is completion, whether it is of a pattern (my friend) or different prototypes of the same object over time (me).

Three Chinese export teapots from the 18th century. They range from early on the left to late on the right. Though they are not a set in the traditional sense of the work, they fulfill my objective, which it to show how style changes over time.

Three Chinese export teapots from the 18th century. They range from early on the left to late on the right. Though they are not a set in the traditional sense of the work, they fulfill my objective, which it to show how style changes over time.

Catherine Carey gives us insight into this force of human nature in the Journal of Economic Psychology. She discusses collecting for the purpose of set completion rather than financial gain or other reasons, though they are not mutually exclusive. For example, a set may be worth more in the secondary market than its parts individually.

What is new in Carey’s paper is that she constructs an economic model out of a pastime usually perceived in these terms. She explains the economic utility of collecting in sets.

By dictionary definition, economic utility is the ability of a good or service to satisfy the need or want of a consumer. Carey’s explanation is broader, “Utility maximization is indeed the seeking of satisfaction and the tradeoffs taken to enhance such pleasure.”

In more simplified terms, set collectors initially gather objects that have value to them as individual units. Later, as more parts are added and a set begins to take shape, single pieces are of less interest, but valued rather for the good they offer to make the set whole. In Carey’s words, “The social value may simply be the individual’s utility from owning the complete set ….or it could be a collecting community’s idea of the collection’s financial worth on the secondary market. In either case, set completion motivates collecting behavior.” The author goes on to say that the relevant literature suggests that this model represents a significant percentage of collectors. My experience is compatible with this.

Read more at: http://www.hcplive.com/physicians-money-digest/columns/my-money-md/05-2015/Why-People-Buy-What-They-Know-They-Wont-Use#sthash.uUfbAfg7.dpuf