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
Also known as
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)
Case Studies
Real-world examples showing how IKEA effect manifests in practice
Context
A mid-size B2B SaaS company invested in a major redesign of its analytics dashboard to make it highly customizable. A small cross-functional team spent six months designing and coding a flexible 'drag-and-configure' interface that reflected many of their personal preferences and workflows.
Situation
Leadership greenlit the release without extended external testing because the team was confident in the design after numerous internal iterations. The product team wanted a fast launch to meet quarterly growth targets and believed the new dashboard would drive retention and upsells.
The Bias in Action
Team members who had invested time assembling and configuring the dashboard began to overvalue the product's importance and elegance — assuming customers would share their enthusiasm. That attachment made them dismiss early, lukewarm feedback from a small pilot as 'teething issues' instead of signals of misfit. They resisted simplifying workflows or removing features that consumed engineering time because those were components they'd personally crafted.
Outcome
The company launched the dashboard to all customers. Adoption among existing users was low, new-user onboarding took 2× longer on average, and support volume spiked. Rather than boosting retention, the release coincided with a measurable dip in new-account expansion because customers found the configuration overhead a barrier to deriving value quickly.