Monday, February 18, 2013

"IKEA Effect" May Blind Business into Favoring Its Own Projects

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Link to article:
Why You Love That IKEA Table, Even If Its Crooked

We may think we are laboring on a project because we love it and believe in its worth, but a Tulane University professor thinks we have it backward.  We love the projects BECAUSE of the labor we have put into them and treasure what we ourselves build.  He calls this the "IKEA effect" and warns that it can blind managers into hanging on to bad projects they have invested time and effort into.

Excerpt: "Have you ever spent a couple of hours working on a craft project — or a presentation for work — and then fallen in love with what you've accomplished? Do the colors you've picked for your PowerPoint background pop so beautifully that you just have to sit back and admire your own genius?

If so, get in line: You're the latest person to fall victim to the Ikea Effect.

The name for this psychological phenomenon derives from the love millions of Americans display toward their self-assembled furniture (or, dare we say it, their badly self-assembled furniture) from the do-it-yourself store with the Scandinavian name.

'Imagine that, you know, you built a table,' said Daniel Mochon, a Tulane University marketing professor, who has studied the phenomenon. 'Maybe it came out a little bit crooked. Probably your wife or your neighbor would see it for what it is, you know? A shoddy piece of workmanship. But to you that table might seem really great, because you're the one who created it. It's the fruit of your labor. And that is really the idea behind the Ikea Effect.'

Most of us intuitively believe that the things we labor at are the things we love. Mochon and his colleagues, Michael Norton at the Harvard Business School and Dan Ariely at Duke University, have turned that concept on its head. What if, they asked, it isn't love that leads to labor, but labor that leads to love?

In a series of experiments, they have demonstrated that people attach greater value to things they built than if the very same product was built by someone else. And in new experiments published recently, they've discovered why it happens: Building your own stuff boosts your feelings of pride and competence, and also signals to others that you are competent. There is an insidious element here: People made to feel incompetent may be more vulnerable to the Ikea Effect. On the other hand, Mochon has found, when people are given a self-esteem boost, they appear to be less interested in demonstrating to themselves and to others that they are competent."

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