The Ikea Effect: The illusion behind hard work

By Niveditha Lakshmi Narayanan

With the introduction of the lockdown in 2020, everyone around me started hunting down new hobbies to pass their time, some went back to their childhood ones - dancing, singing; some of them chose to entertain themselves by playing online games like Ludo, and Among Us. However, what caught my eye was the mouthwatering loaves of banana bread and sourdough all over Instagram. Therefore, I decided, if I cannot order them, I was going to make them myself. After multiple failures of having overcooked, rubbery bread and very runny cakes, I had no choice but to give up. I resorted to the next best option, pre-prepared cake mixes. It made my life so much easier, involved lesser ingredients and of course, a way lesser mess to clean up afterward. Like every other person, I decided to show off my skills on social media. Much to my dismay, my baking wasn’t appreciated as much. But to me, it did not matter, this was the best work of art I had ever produced and I was very proud of myself.
In hindsight, the fact that I invested time and effort into something with the bonus of the outcome not being an utter disaster was enough to boost my pride. What I didn’t know was I was exhibiting a behavior known as the Ikea Effect.
For a more relatable scenario, think about the time you spent days writing a piece of code and when you run it, Stata concludes “End of Do-File!” and there is not a single red line of code in sight. That sheer moment of joy is unexplainable, but, nobody around you at home (courtesy of work from home!) appreciates the amount of work that has gone in or the transformation the dataset has had. There’s another example of the Ikea effect.

Termed by Michael I. Norton Daniel Mochon and Dan Ariely, the Ikea Effect is the driving force behind the booming success of the Swedish retailer, Ikea. The effect is defined as “labor alone can be sufficient to induce greater liking for the fruits of one’s labor: even constructing a standardised bureau, an arduous, solitary task, can lead people to overvalue their (often poorly constructed) creations” in their 2011 paper. In their experiments, two groups of people were given Ikea boxes, one received already constructed ones while the other received unassembled ones. After assembling these boxes, it was seen that the second group seemed to value the self-constructed boxes at a much higher price.

It is because of the Ikea Effect, that brands choose to introduce personal customisations in their products. Children as young as three or four are prone to be biased by the Ikea Effect. For instance, Build-A-Bear Workshop attracts children by giving them complete freedom to choose and build the type of stuffed toy they want, justifying the higher price charged.

In my case, it was the pre-prepared cake mix that introduced me to this effect. In the 1950s when Betty Crocker came up with the concept of pre-prepared cake mixes, they initially failed. Home makers thought it was too easy to make and that it undervalued their skill and labour. But an introduction of an additional step of asking customers to break an egg and add it in manually, made a world of difference to their sales.

There is, however, a downside to all this, the effort and labor put into an activity can sometimes blind our judgement. Think about the number of times you have watched directors, actors and producers talk highly of a movie they have crafted and convincing you that their movie is going to change the face of cinema going forward, when in fact, the movie performs unsatisfactorily in the box office when it hits the theatres. It is with the same hope that I write this article, hoping it interests the reader and holds everyone’s attention till the very end.