Consumption or prosumption? A question of resources

Purpose: Despite the recent growth of the do-it-yourself market, very little is known as to how or why individuals actually choose to engage in prosumption behavior. The purpose of this study is to specifically examine the decision process of actors when determining the level of resource commitment and integration necessary to prosume or consume a service, thus offering insights to both managers and academics alike. Design/methodology/approach: A multi-method study using both qualitative and quantitative research examines the decision of actors to consume or prosume a service. A conceptual model is presented and tested. Findings: The results identify the primary drivers individuals considered when evaluating the resource commitment necessary for a make or buy decision. This research offers empirical support for the application of transaction cost analysis as an appropriate theoretical explanation of how actors decide to prosume or consume a service. The authors further suggest, based on these findings, that transaction cost analysis is a viable middle-range theory to explain the commitment and sharing of resources between actors engaged in co-production within the perspective of a service-dominant logic. Research limitations/implications: Future research is needed to identify opportunities for hybrid models that consider the appropriateness of these findings within larger service networks, as well as potential moderating or mediating influences of the direct effects identified and investigated. Originality/value: This study offers an initial attempt to provide a theoretical explanation for the resource integration decisions (e.g. make or buy) faced by individuals in a growing segment of the economy. The findings enable better informed strategies to be identified by both service providers and retailers.