Psychological ownership is the feeling of possession of a particular target or item, concept, organization, or other individual, which formal ownership might or might not support. People invest in the target of ownership as an expression of who they are and where they fit in. The individual has a personal stake in the object's performance, as that performance reflects their identity. The outcome is a sense of possessiveness, a desire to retain ownership, and a psychological attachment to the object (Pierce et al., 2001).

To understand psychological ownership, it is vital to distinguish it from formal ownership. To explain this difference, psychological ownership is created when formal ownership is designed and constructed according to three fundamental rights: The right to possess some share of the organization's financial values (equality), the right to exercise influence over the organization (influence), and the right to be given information about the current status of the organization (information) (Chi & Han, 2008).

Pierce et al. (2001), in their seminal text on Psychological ownership in organizations, identified three “roots” that contribute to an individual’s fundamental desire for ownership: efficacy, self-identity, and belonging. Olckers and Du Plessis (2012) have further suggested that autonomy and responsibility should be included as possible additional dimensions of psychological ownership. Therefore, there are three origins of psychological ownership that were discussed:

1. Self-efficacy refers to the possibility of being in control and able to effect an outcome of actions. The psychological component results in feelings of self-efficacy.
2. Self-identity refers to a personal cognitive connection between an individual and an object or target and reflects the individual's perception of oneness with the target.
3. Belonging refers to the feelings of psychological ownership through attachment to a place or object. These feelings lead to that place or object becoming 'home' to the individual.

Pierce et al. (2001) also described three “routes” of how psychological ownership is formed: controlling the target, coming to intimately know the target, and investing in the self. These routes explain how psychological ownership occurs :

1. Controlling the target: The control exercised over an object eventually gives rise to feelings of ownership toward that object. For example, an employee in his workplace who uses the same desk, chair, and laptop. Therefore, exercising full control over these objects may develop feelings of psychological ownership over time.
2. Coming to intimately know the target:  It is best to illustrate this with an example of a gardener who, after a certain time, feels that the garden belongs to him. The more information and the better knowledge an individual has about an object, the deeper the relationship between the self and the object, which means the stronger the feeling of ownership toward it.
3. Investing in the self: The investment of the self comes in many forms, including investment of one's time, ideas, skills, and physical, psychological, and intellectual energies. As a result, the individual may begin to feel that the target of ownership flows from the self.

In a social marketing context, psychological ownership is typically felt following the completion of ownership activities that contribute to an organization’s being. For instance, a woman who has purchased Yoplait yogurt because the company is closely affiliated with the Susan G. Komen Breast Cancer Research Foundation might feel she ‘owns’ a part of the breast cancer fight (Folse et al., 2010).

Gineikiene et al. (2017) used the psychological ownership theory as a theoretical framework in their advertisement research in which they sought to understand the role of psychological ownership in shaping perceptions and preferences of domestic versus foreign products. They provide evidence that quality judgments and purchase behavior of domestic products depend on different levels of shared ownership. From a theoretical perspective, they show that domestic psychological ownership is an important construct that explains how preferences for domestic brands are formed.

Karahanna et al. (2017) build on and extend research on psychological ownership by developing the concept of psychological ownership motivation. Drawing on psychological ownership theory that has identified the underlying motives (the need for effectance, self-identity, and for having a place) that are the roots of psychological ownership. They define psychological ownership motivation as the drive to engage in behaviors to satisfy the motives that underlie psychological ownership. They found that psychological ownership motivation drives individuals to engage in social media use because social media have the affordances to fulfill the needs of psychological ownership. The empirical results suggest that these needs collectively contribute to psychological ownership motivation, which, in turn, drives social media use.

Psychological ownership, distinct from formal ownership, revolves around the feeling of possession towards various entities, rooted in fundamental desires like efficacy, self-identity, and belonging. It emerges through routes like control, investment of self, and intimate knowledge of the target (Pierce et al., 2001). Recent studies underscore its profound impact on advertising. Understanding psychological ownership empowers advertisers to tailor campaigns that resonate deeply with consumers, leveraging this emotional connection to forge stronger brand associations and potentially influence consumer behavior.

References

Chi, N. W., & Han, T. S. (2008). Exploring the linkages between formal ownership and psychological ownership for the organization: The mediating role of organizational justice. Journal of Occupational and Organizational Psychology, 81(4), 691-711.

Folse, J. A. G., Moulard, J. G., & Raggio, R. D. (2012). Psychological ownership: a social marketing advertising message appeal?. International Journal of Advertising, 31(2), 291-315.

Gineikiene, J., Schlegelmilch, B. B., & Auruskeviciene, V. (2017). “Ours” or “theirs”? Psychological ownership and domestic products preferences. Journal of Business Research, 72, 93-103.

Karahanna, E., Xu, S. X., & Zhang, N. (2015). Psychological ownership motivation and use of social media. Journal of Marketing Theory and Practice, 23(2), 185-207.

Olckers, C., & Du Plessis, Y. (2012). Psychological ownership: A managerial construct for talent retention and organisational effectiveness. African Journal of Business Management, 6(7), 2585-2596.

Pierce, J. L., Kostova, T., & Dirks, K. T. (2001). Toward a theory of psychological ownership in organizations. Academy of Management Review, 26(2), 298-310.