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Named after the renowned Swedish furniture retailer, the IKEA effect explores how individuals place a higher value on products they have actively contributed to creating or assembling.

Coined by researchers Michael Norton, Daniel Mochon and Dan Ariely in 2012, the IKEA effect highlights the tendency for people to overvalue items they have had a hand in producing. This can include assembling furniture, crafting DIY projects, or even personalizing objects.

At its core, the IKEA effect stems from the human desire for autonomy and the need to justify one's efforts. When individuals invest time, effort, and personalization into a project, they develop a sense of ownership and attachment to the outcome. This emotional investment leads to a perceived increase in the item's value, regardless of its objective worth.

Cognitive bias

The IKEA effect can be attributed to various cognitive biases, including effort justification and cognitive dissonance. Effort justification occurs when individuals rationalize their exerted effort by inflating the perceived value of the outcome. Cognitive dissonance theory suggests that people strive for consistency between their beliefs and actions, leading them to value self-made items to align with their efforts.

Understanding the IKEA effect has significant implications for marketing, consumer behavior, and self-perception. Marketers leverage this phenomenon by providing opportunities for consumers to customize products, which creates a sense of ownership and attachment. 

Decision-making

The IKEA Effect influences decision-making by causing individuals to assign greater value to products they've contributed to making. Whether assembling furniture or crafting DIY projects, people tend to overestimate the worth of self-made items due to emotional attachment and the need to justify effort. 

This impacts consumer behavior, leading individuals to prefer customizable products and invest in projects where they can personalize outcomes. Recognizing the IKEA Effect can help consumers make more informed decisions, and marketers capitalize on the desire for ownership and attachment in their product offerings.