Memory and Information Processing Biases

IKEA effect

The IKEA effect is a cognitive bias that causes people to place a disproportionately high value on products they partially created. Named after the popular Swedish furniture retailer, which sells products needing assembly, the effect highlights how the act of building or assembling something can lead to an increased valuation of the end product.

How it works

The IKEA effect operates on the principle that when individuals invest effort and time into a task, they develop a sense of ownership and pride in their work. This self-involvement enhances personal connection and appreciation for the finished product, regardless of its actual quality or utility. The phenomenon can be attributed to several psychological factors, including the need for competence, self-efficacy, and commitment.

Examples

Consumers who assemble their own furniture from IKEA often value it more than similar pre-assembled items, due to the effort and involvement required.
DIY enthusiasts experience a greater sense of satisfaction and pride in home improvement projects they complete themselves, compared to those they hire professionals to do.
Children treasure handmade crafts more than store-bought toys because they participated in creating them.

Consequences

Businesses might see increased customer loyalty and product valuation when they engage customers in the creation process.
Product value can become inflated unjustifiably due to the personal attachment formed during assembly or creation.
The bias can lead to poor decision-making when consumers overestimate the worth or functionality of self-assembled products.

Counteracting

Awareness and education about the IKEA effect can help individuals recognize and mitigate the bias.
Utilizing objective measures, such as quality assessments and third-party reviews, can provide a balanced perspective on a product’s value.
Encouraging objective comparison to similar pre-assembled products can aid in discerning actual quality from perceived value added through personal effort.

Critiques

Some critics argue the IKEA effect underestimates the importance of functionality and practical utility in driving consumer satisfaction.
The effect might not account for individuals who dislike DIY tasks, leading to varied results across different groups.

Fields of Impact

Psychology & Social Science

Economics & Finance

Consumer Behavior & Market Research

Advertising & Marketing

Also known as

Effort justification

Self-assembly bias

Relevant Research

The IKEA effect: When labor leads to love
Norton, M. I., Mochon, D., & Ariely, D. (2012)
Journal of Consumer Psychology, 22(3), 453-460
125-140
Franke, N., Schreier, M., & Kaiser, U. (2010). The 'I designed it myself' effect in mass customization. Management Science, 56 (1)

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