The IKEA Effect: When You Place More Value on What You Make Yourself

The IKEA effect is all about our need to feel competent. Assembling furniture and making bread are clear examples of this. Big companies take advantage of this cognitive bias and increase prices.
The IKEA Effect: When You Place More Value on What You Make Yourself

Last update: 09 February, 2021

The IKEA effect takes its name from something that many of us often experience: the pleasure of building things ourselves. The “do-it-yourself” movement has been growing in the marketing world for decades and extends far beyond the realm of DIY and furniture. Business psychologists and advertisers have known about this striking cognitive bias for decades.

Everyone has done it at some time or another: assembling a desk, baking a cake from a box, or even painting a picture using instructions that describe the shapes and colors that you should apply to each part of the canvas.

People like to feel the satisfaction of being able to create or achieve something with their own hands.

This feeling of competence even makes you value the final product much more, whether it’s a piece of furniture, a dessert, or even dyeing your own hair. Companies are well aware of this and this means they take advantage and charge more for these products. You’d think that the fact a customer has to assemble a closet would make it cheaper, but that’s often not the case.

Stay with us as we analyze this effect.

A toolbox.

The IKEA effect: five characteristics you should be aware of

The IKEA effect is almost as old as the Swedish multinational company itself. However, it wasn’t until 2011 that this cognitive bias was first coined. It was Dr. Michael I. Norton of Harvard Business School and Daniel Mochon of Yale University who, in this report, described the tendency that people have to value a product much more highly when they make it themselves.

One thing they were able to conclude is that, when the consumers assembled the furniture themselves, they placed a higher value on the final product. A kind of bond of affection was created with the bed or table they assembled or the chairs that arrived unassembled. However, there was one important aspect: the assembly shouldn’t be excessively complex.

However, the IKEA effect tells us much more than this.

Even though you may think otherwise, you aren’t paying less

This strategy for big companies is intelligent and very beneficial. One thing that the authors of this study, Norton and Mochon, discovered is that the IKEA effect means that the more effort you put into something, the more you value it.

This makes you unaware that, in reality, you’re paying more for a product that should cost much less (as the manufacturer is avoiding assembly costs).

Companies like IKEA itself and also Build-A-Bear (where you can make your own teddy bear) follow this business model. Moreover, something else you mistakenly believe is that, as you’re the one assembling the furniture, the price must be cheap. However, this often isn’t the case.

The IKEA effect: even if it’s not perfect, it’s still “my furniture”

The IKEA effect is also based on another curious cognitive bias: the endowment effect. It states that people sometimes establish a sense of ownership over what they made themselves.

For example, if doesn’t matter if your bedside table is crooked. It’s your table because you assembled it. You spent almost two hours assembling it, and so that item is a part of you. Even if the final result isn’t ideal.

The same goes for what you cook. Sometimes, you’ll insist on eating a meal you made even if it doesn’t taste that good, simply because you made it yourself.

Self-efficacy and the need for competence

There’s something quite remarkable about baking a cake when you’re given all the ingredients in a box. There’s also a certain pleasure in assembling a closet or a bunk bed for your children. These tasks give you a welcome sense of self-efficacy.

Few things are as positively reinforcing as seeing that you’re doing well, and that, by following the instructions, you were able to build a piece of furniture or make a cake.

People need these experiences of competence to improve their self-perspective. With the IKEA effect, it’s very common for people to share all the things they’ve made with others. We all like our friends and family to see what we’ve made for ourselves, including food.

The big companies knew that this would happen and they knew the satisfaction it would bring us. They want us to feel this way because this will lead us to avoid realizing that the product may not be worth the money they’re charging for it.

Make it yourself with your own raw materials and without instructions

That being said, there’s a much more enriching and rewarding approach that we’d like to tell you about. One that can be much more beneficial to you psychologically.

You should try innovating! Use a bit of radical creativity and create your own products without resorting to something that’s already “prefabricated”. Why not make a fabulous dessert without resorting to those ready-made products sold in supermarkets?

Similarly, there’s nothing more rewarding than restoring old furniture and giving it a new use. In essence, there are many more formulas which will enable you to feel competent and end up with wonderful results.

The IKEA effect is becoming more and more common on the market and you’d do well to identify it when it’s being sold to you.

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