Counting Monopoly Money Twice: Resale Discounting in Consumer-to-Consumer Exchange

Abstract

Consumer-to-consumer (C2C) secondhand exchange activity has exploded due to increased user connectivity stemming from widespread digital platform development and adoption. This research focuses on the effects of participation in secondhand exchange collectives on price perceptions. In three studies, the authors find that participation in secondhand exchange leads to price perception changes at various stages of the buying and reselling process, including traditional retail purchase decisions via resale discounting, a novel decision making bias. This research demonstrates that secondhand markets can cause individuals who are considering a purchase to (1) view firsthand prices as more reasonable and (2) increase purchase likelihood of firsthand products. Individuals who engage in secondhand exchange collectives report higher worth for products but only in secondhand-relevant categories. Finally, when individuals resell items, despite factoring resale income into the cost of the original item as a mental discount, they also reduce price perceptions of a future, unrelated purchase.