In the index of cognitive biases (previously), I came across the IKEA effect: why do we place disproportionately high value on things we helped to create?
Similar to the endowment effect (our tendency to overvalue our own belongings), the IKEA effect explains why we’re willing to pay a significant premium (over 60%!) for products that require assembly. Not only that, but we often value our amateur efforts as highly as similar expert creations—and expect others to agree, too.
The original research article (full text), co-authored by Dan Ariely of Predictably Irrational, provides a great historical example:
When instant cake mixes were introduced in the 1950s, […] housewives were initially resistant: the mixes made cooking too easy, making their labor and skill seem undervalued. As a result, manufacturers changed the recipe to require adding an egg; [which] led to greater subsequent adoption. […] infusing the task with labor appeared to be a crucial ingredient. Similarly, Build-a-Bear offers people the “opportunity” to construct their own teddy bears, charging customers a premium even as production costs are foisted upon them. […] The notion that labor can increase people’s willingness to pay is an underlying theme.
This psychological “effort justification” observation wasn’t new. It had been studied since the 1950s and was already being used by marketers (not just in cake mix).
Completely standardised, mass-produced products, such as those from IKEA and Lego, are classic examples of the effect in action, but there are limits:
labor leads to love only when labor results in successful completion of tasks; when participants built and then destroyed their creations, or failed to complete them, the IKEA effect dissipated.