Zone of Optimal Distinctiveness: Provider Asset Personalization and the Psychological Ownership of Shared Accommodation

In this paper, we conceptually explore how value co-creation in peer-to-peer lodging services is constrained by a fundamental tension between a provider’s personalization and psychological ownership of a shared accommodation and customers’ psychological ownership of it. Our conceptual framework contributes to theory development about the unique nature of service in the sharing economy. Drawing on literature about service-dominant logic, service interactions, the theory of extended self, the experience economy, psychological ownership, and strategic management, we contend that there is a zone of optimal distinctiveness wherein both a provider’s and a customer’s psychological ownership of shared accommodation, as well as the provider’s personalization of this asset, are optimized. It is beneficial for providers of peer-to-peer lodging services to stay within this zone of optimal distinctiveness when personalizing their leveraged assets in the sharing economy. Optimizing the psychological ownership of shared accommodation is desirable because it helps to satisfy the basic human needs of both a customer and a provider involved in a peer-to-peer lodging service, thereby increasing value co-creation in their service relationship. Also, a customer with high psychological ownership of shared accommodation will take better care of this asset, thereby reducing a provider’s risk for property damage.