CogBlog – A Cognitive Psychology Blog

I want you to think of the furniture in your house. There is the bedroom furniture set or the kitchen chairs or the family room couch or even the framed photos in the hallway. But, you know that handmade bookshelf, the one that is a little lopsided but “has character”? Or what about the barely-functional pinch pots you made in summer camp? If you are anything like me, you have held these items in your grips for years and can’t just throw them away. You built those things! Your blood, sweat, and tears (ok maybe that’s a stretch…) went into creating something and you like them. You like them maybe even more than the thing you bought at the craft store. Store bought things should be more expensive because they are made professionally, but you are willing to pay more for something handmade. But should you? Handmade items are often made by amateurs and are lower quality than something made by a machine. However, the crooked, scuffed items you assemble from a box get more attention and praise. This trap you are falling into is so quirkily named the IKEA effect (yes after the Swedish furniture brand). This concept describes the tendency for people to overvalue products that they themselves created, even more than machine manufactured products. So yes, that handmade ornament by little cousin Johnny WILL remain on the Christmas tree for years to come, despite the poor craftsmanship!

What is valued does not always hold the highest value!

This effect originated in the field of Consumer Psychology to describe cognitive processes that underlie consumer behavior. A study that first proposed the term described the tendency for people to overvalue their own creations in comparison to professional creations of the same or better quality. This effect does not just rely on objective value of the products either; IKEA boxes of the same caliber are rated as worth more money if they are self-assembled (Norton, Mochon, & Ariely, 2012) and so are origami structures and LEGO buildings (Norton et al., 2012). Products themselves clearly hold intrinsic value (perceived natural value) to those beholding them, but other subjective factors are contributing to filling the gap between objective value and customer value. Our emotions play a large role in decision making. Wow! It seems like we are not consciously in control of our judgments on objects! Yikes!

Fear not! The IKEA effect is hardwired into our very own brains. Neuroscientists have noticed that if a person believes that they created something (a shoe design), they will ascribe more value to it whether they created it or not. Our brains also send out higher amygdala (the area of the brain connected to emotionality) outputs when we view something that we created (Koster, Sharot, Yuan, De Martino, Norton, & Dolan, 2015) or even when we view something we believe we created.  The emotional connection to products that we see our own effort in is very clear from these findings, but what is so emotional about an assembled IKEA box? 

The secret to all successful products.

Emotional processes tend to have robust effects on the way that we interact with the world. In general, we are more attracted to what we believe holds sentimental value. Products that are overvalued from the IKEA effect follow this trend. These products are perceived as a culmination of time and effort, which translates into love. You heard me correctly, love! A handmade product takes more effort to make and is viewed as more attractive than a machine made product (Kruger et al., 2004). Something that is handmade was made with love, just like Grandma’s cookies. So what? So, a creation’s essence (all of the parts that help our minds make up an item’s function and identity) involves the creating artist’s emotion, passion, and hard work. Our minds absorb this essence when making judgments about value; the emotion is embedded in the product so it is translated as something made with love (Fuchs, Schreier, & van Osselaer, 2015). Even if the product was not made by someone else but made by ourselves, the objective value still gets a boost in our minds. This brings in the involvement of a self-enhancing bias, meaning that we have a motivation to view ourselves more positively (Fuchs et al., 2015). We ascribe more value to our homemade things in order to improve how we feel about ourselves. 

So, we overvalue things because we have emotional brains who recognize artistic creation, is that it? Nope. Our minds also take into account how much effort someone put into a product. This involves effort justification, the subconscious belief that we deserve a reward for our efforts and hard work. When we create something with our own hands, we are conscious of the effort put into the product and our mind has an emotional desire to acknowledge that effort with more value (Marsh, Kanngiesser, & Hood, 2017). Additionally, when we follow a product through from start to finish, we adopt ownership over the item, improving the value. Effort justification and mere ownership effects were found to start around 5 years of age, when children were asked which objects they preferred depending on if they created it, how much effort was put in, and whether the object was “theirs” (Marsh, Kanngiesser, & Hood, 2017). The finding that ownership and effort increase an object’s value starting early in life suggests that our brains are hardwired to like things that are “ours”, which helps explain why we overvalue self-created products. Ascribing additional value to an object due to an awareness of the effort put in or the ownership is the IKEA effect in action. 

Throughout this post, it has been clear that products are overvalued when there is love involved, when effort was put into creation, or when we have ownership over it. So what? These cognitive and emotion-driven instincts are likely affecting the way you interact with objects and more specifically, your consumer patterns. As a consumer, having an awareness of the IKEA effect and how manufacturers may advertise products as handmade in order to justify overcharging can help you make smart decisions. When shopping, consider the objective value of an object without the extra lures of artisanal value or effort. This may save you some money! However, if any of you readers are trying to earn money in the retail market, the IKEA effect can definitely work in your favor. Advertising your products as handmade and emphasizing the artistic efforts are sure ways to get customers to award value to your products and to help your business dreams come true. Our minds are emotional and not every decision boils down to objective facts, so it is important to be aware of the biases you may fall into, such as the IKEA effect. Now, go out there and be more educated consumers!

References

Fuchs, C., Schreier, M., & van Osselaer, S.M.J. (2015). The handmade effect: What’s love got to do with it? Journal of Marketing, 79: 98-110. Doi: 10.1509/jm.14.0018

Koster, R., Sharot, T., Yuan, R., Martino, B.D., Norton, M.I, & Dolan, R.J. (2015). How beliefs about self-creation inflate value in the human brain. Frontiers in Human Neuroscience, 9. Doi: 10.3389/fnhum.2015.00473

Marsh, L.E., Kanngiesser, P., & Hood, B. (2018). When and how does labour lead to love? The ontogeny and mechanisms of the IKEA effect. Cognition, 170: 245-253. Doi: 10.1016/j/cognition.2017.10.012

Newman, K. (2013). Image. Retrieved from https://tech.co/news/ikea-effect-dan-ariely-2013-08

Nikolov, A. (2017). Image. Retrieved from https://uxdesign.cc/design-principle-ikea-effect-2d908b2de81

Norton, M.I., Mochon, D., & Ariely, D. (2012). The IKEA effect: When labor leads to love. Journal of Consumer Psychology, 22(3): 453-460.