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The IKEA effect: how we value the fruits of our labour over instant gratification

The “IKEA effect”

The “IKEA effect”

If you make things more laborious, the consumers will value them more.

In the 1950s, a US food company wanted to sell more of its brand of instant cake mixes. They were advised to replace powdered eggs with fresh eggs because the all-instant cake mix makes baking too easy. It undervalues the labor and skill of the cake maker.

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The IKEA effect: how we value the fruits of our labour over instant gratification

The IKEA effect: how we value the fruits of our labour over instant gratification

https://theconversation.com/the-ikea-effect-how-we-value-the-fruits-of-our-labour-over-instant-gratification-113647

theconversation.com

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Key Ideas

The “IKEA effect”

If you make things more laborious, the consumers will value them more.

In the 1950s, a US food company wanted to sell more of its brand of instant cake mixes. They were advised to replace powdered eggs with fresh eggs because the all-instant cake mix makes baking too easy. It undervalues the labor and skill of the cake maker.

Testing the IKEA effect

Labor alone can be sufficient to induce a greater liking for your own work. A study confirmed the phenomenon. Experiments involved assembling IKEA boxes, folding origami, and building with Lego.

  • The results showed participants valued items they assembled themselves more, demonstrated by their willingness to pay to keep it.
  • However, when participants spent too much time building or deconstructing their creations, or failed to complete the task, their willingness to pay for the item declined.

Related concepts

Several other important economic behaviors that are connected to the IKEA effect are:

  • The endowment effect: Owning a product increases its perceived value.
  • Effort justification: An individual who makes a sacrifice to achieve a goal attribute greater value to the achievement.
  • Personal preference: The fact of being attached to a particular brand.

Convenience isn't everything

Food and grocery brands are using the IKEA effect to attract new "value-seeking" customers. The ideal for marketers is having customers do most of the work and feel great about it while perceiving they have gained "greater value for money".

Ready-to-create meal kits are a great example where they use prepackaged raw ingredients that you prepare and cook yourself.

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The decoy effect
The decoy effect

It happens when consumers change their preference between two options when presented with a third option, or decoy.

The decoy is priced to make one of the other options much more attra...

How decoys work

When consumers are faced with many alternatives, they often experience choice overload that increases anxiety and hinders decision-making.

Consumers try to reduce this anxiety by selecting only a couple of criteria (say price and quantity) to determine the best value for money.

A decoy steers you in a particular direction while giving you the impression that you are making a rational, informed choice.

Decoy example in the market

Consider the price of drinks at a well-known juice bar: a small (350 ml) size costs $6.10; the medium (450 ml) $7.10; and the large (610 ml) $7.50. The medium is a slightly better value than the small, and the large better still. The medium is designed to be the decoy, steering you to see the biggest drink as the best value for money.

If you buy the biggest, was it because you made a sensible choice, or have you been manipulated to opt for bigger than intended?

Best foods don’t have labels
Best foods don’t have labels
Because they are just one ingredient: avocado, lentils, blueberries, broccoli, almonds, etc.
There is no "best diet"

The “best” diet is a theme: an emphasis on vegetables, fruits, whole grains, beans, lentils, nuts, seeds, and plain water for thirst. 

That can be with or without seafood; with or without dairy; with or without eggs; with or without some meat; high or low in total fat.

The "Age" of vegetables
The best vegetables are likely to be fresh and locally sourced, but flash frozen is nearly as good (as freezing delays aging). Those “fresh” vegetables that spend a long time in storage or transit are probably the least nutritious.

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The illusory truth effect
The illusory truth effect

It's our tendency to believe false information to be correct after repeated exposure to it.

The illusory truth effect is the reason why advertising and propaganda works.

Why repetition reinforces a belief

The typical explanation is that our brains take shortcuts to save energy:

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    Carl Sagan
    Carl Sagan

    “One of the saddest lessons of history is this: If we’ve been bamboozled long enough, we tend to reject any evidence of the bamboozle. We’re no longer interested in finding out the truth. The bamboozle has captured us. It’s simply too painful to acknowledge, even to ourselves, that we’ve been taken. ”

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