I want to be sustainable, but I love my car! A mixed-method study of consumer adoption of u-PSS from a Prospect Theory perspective

University essay from Handelshögskolan i Stockholm/Institutionen för företagande och ledning

Abstract: Critical to the transition towards a Circular Economy is for organizations to move from traditional linear, make-use-dispose business models to circular. One such business model, "Use-Oriented Product-Service- Systems'' (u-PSS), has gained increased traction among both scholars and practitioners due to its environmental benefits. An industry which has started to implement this business model is the automotive industry in the form of car-sharing offerings, where major environmental gains are predicted. Although consumers are interested in engaging in more sustainable activities, this is not reflected in their behavior in terms of mobility, and due to lack of research and thus knowledge on consumers' attitudes, intentions and behaviors, companies are struggling to diffuse their offerings. This thesis aimed to address this gap through a mixed-method study to explore and determine the underlying factors that affect consumer adoption intentions of u-PSS within automotive, and how companies within the industry might address these factors through the framing of their offering to increase the adoption rate. By applying the logic of Prospect Theory, we found that the factors which influence consumers' adoption intentions are Economical- and Convenience value and Financial- and Flexibility risk. Additionally, we found that consumers have an emotional bias towards car ownership and that their individual situation in terms of car-sharing experience and car ownership affects their perceived behavioral control and thus their intentions. However, framing a u-PSS offering within automotive with emotional cues to address this emotional bias did not increase consumer adoption intention. We, therefore, suggest u-PSS operators within automotive to take these aspects into account when framing their offering towards the consumers.

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