IKEA effect

The IKEA effect is a cognitive bias in which consumers place a disproportionately high value on products they partially created. The name derives from the name of Swedish manufacturer and furniture retailer IKEA, which sells many furniture products that require assembly. The IKEA effect is a cognitive bias in which consumers place a disproportionately high value on products they partially created. The name derives from the name of Swedish manufacturer and furniture retailer IKEA, which sells many furniture products that require assembly. The IKEA effect has been described as follows: 'The price is low for IKEA products largely because they take labor out of the equation. With a Phillips screwdriver, an Allen wrench and rubber mallet, IKEA customers can very literally build an entire home's worth of furniture on a very tight budget. But what happens when they do?' They 'fall in love with their IKEA creations. Even when there are parts missing and the items are incorrectly built, customers in the IKEA study still loved the fruits of their labors.' The IKEA effect was identified and named by Michael I. Norton of Harvard Business School, Daniel Mochon of Yale, and Dan Ariely of Duke, who published the results of three studies in 2011. They described the IKEA effect as 'labor alone can be sufficient to induce greater liking for the fruits of one's labor: even constructing a standardized bureau, an arduous, solitary task, can lead people to overvalue their (often poorly constructed) creations.' Norton, Mochon, and Ariely cited other researchers' previous work on 'effort justification' which had demonstrated that the more effort someone put into something, the more someone will value it. This phenomenon had been observed by Leon Festinger (1957) and in realms ranging from psychotherapy (Axsom & Cooper, 1985) and brainwashing (Schein, 1956). Product designers were familiar with the IKEA effect long before it was given a name. Norton and his colleagues noted that, while not yet named or scientifically established, it had been recognized by marketers for a long time. For instance, when instant cake mixes were first marketed in the 1950s, many homemakers were resistant because the instant mixes made cooking 'too easy', which made their labor and skill feel 'undervalued.' Because homemakers didn't feel 'invested' in the baking process, they put no value on the product. In response to this problem, the producers of the cake mixes made a simple change in the recipe: homemakers were required to add an egg. By adding one more step – cracking an egg – homemakers felt like they were actually baking, which resulted in increased instant cake mix sales. Norton and his fellow researchers also cited the Build-a-Bear product, which allows people to make their own teddy bears. Many consumers enjoy this option, even though they are charged a high price for a product for which, thanks to their labor, the manufacturer does not have to pay production costs. In addition, the researchers pointed out the popularity of 'haycations,' whereby city people pay to do farmers' work for them. In all these cases, the researchers posit, people seem more willing to pay for an item into which they have put a degree of their own labor.