By Ravi Dhar, George E. Newman & Rosanna Smith
Emerging insights on “temporal contagion” explain the unusual contours of limited-edition markets
In 2012, the 23rd vinyl pressing of The Beatles’ White Album sold for $13,750. One year later, the very first pressing, White Album No. 1, sold for $35,000, or more than twice as much.
These auction results carry a superficial logic: number one is better than number twenty-three. But any further scrutiny puts the rationale on shaky ground. Both records were part of the first edition pressing. Both albums include the same songs, are of identical quality, and fit within the same limited set of about three million copies. Nothing distinguishes one album from the other besides a serial number stamped on the front. So what makes number one more valuable than twenty-three?
The answer may have to do with contagion, which helps to explain why people value William Faulkner’s typewriter, or Jimi Hendrix’s guitar picks. These objects are seen as carrying some of the artists’ genius. In new research, my coauthors George Newman and Rosanna Smith and I find compelling evidence that objects perceived as not simply physically close to their creator, but also chronologically close, are imbued with a special aura or essence. We find that consumers view White Albums with a lower serial number as temporally “closer” to The Beatles: White Album No. 1 is thought to have been pressed before White Album No. 23, and is therefore seen as possessing more of The Beatles’ essence. We call this phenomenon “temporal contagion.”
Looking at nearly 8,000 eBay sales, for instance, we found strong and consistent evidence for temporal contagion. Not only do low serial numbers possess a substantial premium, but this effect reaches deep into the market, even to the millionth serial number: consumers will value White Album No. 850,000 more than No. 950,000. To verify that this valuation was based on temporal proximity rather than some other preference for lower serial numbers, we designed an experiment in which serial numbers did not represent chronology. As we expected, consumers preferred the product that was produced earlier to a product that simply had a lower serial number. Serial numbered items within a limited edition set are valued based on what the number implies about the timing of production.
Interestingly, temporal contagion appears to be a very personal phenomenon. Products temporally closer to the source are valued more highly only when that source is a specific individual. When serial numbers were instead associated with a company, numerical order had no effect on value. And what’s more, the strength of temporal contagion seems to depend, in part, on whether the consumer approves of the person associated with that product. We tested this with Shepard Fairey’s iconic 2008 Barack Obama HOPE poster. Those who approved of Obama valued posters with lower serial numbers more than those who didn’t approve of Obama.
One particularly notable aspect of our findings about temporal contagion is that, unlike previous investigations into contagion, the value isn’t derived from direct physical contact: The Beatles didn’t press the White Album; Obama didn’t produce the HOPE poster. Temporal contagion seems to require only a symbolic association with a valued individual. With symbolic association as the key ingredient, the marketing implications of temporal contagion are manifold, though we’re only just beginning to understand them. Does this contagion hold not just when an object is close to its originator, but close to meaningful events? Are effects of temporal contagion additive or multiplicative when combined with physical contagion? And why is this “essence” valued in the first place? As we shift our understanding of this theory to practical application, all of these questions merit closer examination.
This article was co-authored with George E. Newman (Assistant Professor of Management and Marketing) and Rosanna Smith (PhD candidate) at the Yale School of Management.