The Genesis Effect: Digital Goods in the Metaverse

Abstract

This research shows that although the used and unused versions of a digital good (e.g., virtual apparel) are identical in every pixel and functionality, consumers tend to prefer the unused version. This “genesis effect” occurs because consumers tend to perceive used (vs. unused) digital goods as virtually contaminated and because being permanently listed as the first (vs. subsequent) owner in the ownership record can confer a greater sense of status. Specifically, in study 1, analyses of large-scale field data on purchases of digital goods in the metaverse showed that consumers paid substantially more to acquire the unused (vs. used) version of the same good. Studies 2–4 causally demonstrated the genesis effect and its underlying mechanism across metaverse product categories—participants were less likely to purchase digital goods described as used (vs. unused). Virtual contamination and virtual status jointly mediated the effect. Furthermore, being the first—at the genesis of a digital product’s usage history—was particularly special, such that participants were less sensitive to increases in the number of prior owners after the first one. Finally, showing participants that a used good had been digitally reconstituted attenuated the genesis effect. These findings add to the literature on consumer behavior in the metaverse and offer managerial insights on digital goods marketing.