First Look: December 18 – HBS Working Knowledge – The IKEA effect -The IKEA effect

There’s a nice sense of accomplishment that comes with creating something from scratch, whether it’s a batch of brownies or a bookshelf. It feels so good, in fact, that customers are often willing to pay more for build-it-yourself products than for identical products assembled by others. Experimental researchers Dan Mochon, Michael I. Norton, and Dan Ariely uncover the reasons behind this tendency in their article “Bolstering and Restoring Feelings of Competence via the IKEA Effect,” published in the International Journal of Research in Marketing.

For those who have been hearing about the IKEA effect, first described by these authors, but actually discovered through the marketing of cake mix in the 1950′s.

This paper reviews a few experiments utilizing college students about their interest (willing to pay) in products that they put together vs ones that are pre-assembled and how this is mediated by feeling competent (answer it is mediated by this feeling). In other words, people are willing to pay more for products that they build themselves because it enhances their competence. In further experimentation discussed in this paper, manipulating their feeling of competence influences their willingness. Test subjects whose competence is affirmed are less likely to want to engage in co-creation (building their own IKEA box) or pay for co-creation.

Implication for behavior change? Perhaps segmenting the types of people who will be interested in, and value the sharing of their health achievements?

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