Ikea effect

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The IKEA effect is the tendency to place a disproportionately high value on objects that you partially assembled yourself, such as furniture from IKEA, regardless of the quality of the end result.


Examples:

The IKEA Effect contributes to the sunk costs effect. Sunk costs are costs that have already been incurred and cannot be recovered.

Because you spent time assembling the furniture, you won’t discard the end result, regardless of quality or use.


How it is exploited:

Pyramid schemes and similar structures exploit this effect on people, as they take pride in the organizations success because they are directly involved in it:

  • Recruiting.
  • Building.
  • Expansions.
  • Selling.