⚡️Why Do People Pay 63% More For a Flawed Product

STORY

Dan Ariely, a renowned behavioral economist and bestselling author had long been interested in how people assign value to things and how irrational those judgements can be (this is part of my obsession as well!)

In particular, he noticed something strange: people often overvalue things they worked on themselves, even if the end product was… well, not quite amazing.

So in 2011, the team ran a series of studies to see if indeed this was true. Enter the Ikea Effect.

STUDY

As described in the journal article, here are three studies they performed.

1/ IKEA Box Experiment

• Participants assembled a basic IKEA storage box.

• Others just inspected a pre-built, identical box.

• Then, everyone had to set a price they’d pay for it.

• Result: People valued the self-built box 63% higher than the same box pre-assembled.

2/ Origami Experiment

• Novices folded paper cranes and frogs using instructions.

• Then they bid on their own creations and on expert-made origami.

• Result: People overvalued their own clumsy origami and believed others should value it just as much!

3/ LEGO Bidding Experiment

• Participants built LEGO figures under time pressure.

• Some were told their builds would be destroyed immediately; others kept theirs intact.

• Result: Destroying the product weakened the effect showing that the sense of ownership + effort combined is what boosts perceived value.

Even more fascinating?

Outsiders did not value those amateur creations the same way, meaning this value was internally generated through effort, not through actual quality.

Why This Works

The brain equates effort with ownership.

Even a little bit of “I did that” shifts how we see things:

• Effort = Investment

• Investment = Attachment

• Attachment = Value

This isn’t just about products.

It’s about identity.

When we co-create, we commit. And when we commit, we care.

Why IKEA?

They chose IKEA because it’s the perfect metaphor: Mass-produced products that still require customer assembly.

IKEA turns ordinary consumers into creators. And that act of building—even if frustrating, creates ownership, pride, and irrational attachment (I’ve been a victim many times. 😅)

STRATEGY

How does Fender sell $2,000 electric guitars with ease? They let customers build their own electric guitar from scratch—choosing everything from the body to the finish.

Even though most customers aren’t luthiers, they were willing to pay hundreds more because they had a hand in its creation.

Fender didn’t sell guitars. They sold pride.

Just like how Build-A-Break Workshop lets their customers stuff their own teddy bear, choose its clothes, record a custom voice message, and even add a heartbeat. The final product costs significantly more than a standard stuffed animal.

Here are 5 ways to apply the Ikea Effect:

1/ Business Owners & Consultants
Instead of presenting a fully done-for-you plan, pitch a starter concept and say:
"Here’s the strategic skeleton, I’d love your fingerprints on the final version."
That input = buy-in.

2/ Marketers & Product Creators
Let customers personalize or assemble.
“Build your own bundle” > “Pick a product.”
Interactive = investment.

3/ Team Leaders
When launching a new initiative, invite your team to shape how it's rolled out.
They’ll own the outcome because they helped build it.

4/ Coaches & Advisors
Co-create the strategy. Ask:
"How would you adapt this to your style?"
Ownership = follow-through.

5/ Internal Influencers
Trying to win over stakeholders? Present a “rough draft” proposal. Invite edits.
People support what they help shape.

👀 Bottom line? Don’t just deliver. Co-create.

When people help build it, they believe in it even if it’s got a few loose screws. 😉 

(I want to give a shout out to Annette Leach, she attended one of my Legendary One-Liner workshops and she was an all-star participant! Annette is an expert in organizational change and culture, reach out to connect.)

Make your mark, live your legend 🤘🏽

I’ll see you on Sunday!

Howie Chan

Creator of Legend Letters

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