Bolstering and restoring feelings of competence via the IKEA effect

The increasing popularity of co-creation, where consumers actively participate in designing and producing goods, is a significant trend across various industries. This ranges from personalized products like t-shirts and coffee mugs to more complex items such as automobiles. This phenomenon extends to digital media, with individuals showing a preference for creating and sharing amateur content over consuming professionally produced materials. This raises the question: why has co-creation become so prevalent? Several factors contribute to the appeal of co-creation. Functional fit, where customization ensures the product meets individual needs, is a primary advantage. The uniqueness and novelty of self-made goods also enhance their appeal. Finally, the process of creation itself can be inherently enjoyable. However, recent research reveals a more profound aspect: even after accounting for these factors, consumers consistently overvalue their own creations. This phenomenon, the "IKEA effect," demonstrates that individuals place higher value on self-assembled products compared to identical professionally-made ones, even if the product is mundane and not uniquely customized or particularly fun to assemble. This paper investigates the underlying psychological mechanism behind the IKEA effect, hypothesizing that it's driven by the desire to signal competence to both oneself and others. The act of creation provides a means of demonstrating competence, shaping one's environment, and ultimately boosting self-esteem. Dahl and Moreau's (2007) findings support this, highlighting "feelings of competence" as a major motivation for creative tasks. Therefore, the study proposes that perceived competence, associated with the self-created product, directly affects its valuation. It further postulates that individuals will be more inclined to engage in co-creation when their sense of competence is threatened, and less so when it's already affirmed.

Existing literature supports several benefits of co-creation, including functional fit, product uniqueness, and enjoyment of the design process. However, the IKEA effect highlights an additional aspect – the overvaluation of self-created products even when other factors are controlled for. Studies show a willingness to pay more for self-assembled IKEA products than identical pre-assembled ones (Franke et al., 2010; Norton et al., 2012). The current study expands on this by exploring the role of self-signaling and the need to demonstrate competence. Previous research demonstrates the importance of self-perception and identity construction through actions (Ariely & Norton, 2008; Bem, 1972). The creation of products is viewed as a way to signal competence, fulfilling a fundamental human need for effectance (Bandura, 1977; Belk, 1988). Prior work also showcases the use of products as identity signals to others (Belk, 1988; Berger & Heath, 2007), and the use of certain products to signal competence (Thompson & Norton, 2011). Furthermore, the literature on self-affirmation theory explains that individuals strive for a positive self-view (Aronson et al., 1999; Sherman & Cohen, 2006), using "fluid compensation" to balance different aspects of their self-perception (Steele, 1988). The study draws upon this research to examine how self-affirmation might moderate the IKEA effect, predicting that affirming one's identity reduces the need to bolster self-esteem through product creation.

The research employed a series of experiments to investigate the hypotheses. Experiment 1 examined the mediating role of competence, operationalized as feelings of pride, in the relationship between self-creation and willingness to pay. Participants (N=79) were randomly assigned to either build a LEGO car or simply examine a pre-assembled one. Willingness to pay was assessed using a Becker-DeGroot-Marschak (BDM) procedure. Feelings of competence and overall mood were measured using self-report scales. Experiment 2 manipulated the need to signal competence through a self-affirmation task. Participants (N=135) were randomly assigned to one of four conditions: self-affirmation/build, self-affirmation/pre-built, no affirmation/build, and no affirmation/pre-built. The self-affirmation task involved writing about a highly valued personal attribute. Participants then either assembled or examined an IKEA storage box, followed by willingness-to-pay and competence measures. Experiments 3A and 3B tested the impact of manipulating competence on the propensity for self-assembly. In Experiment 3A (N=75), participants were given either easy or difficult math problems to manipulate their sense of competence before being presented with a choice to assemble an IKEA bookcase or receive a pre-assembled one. Experiment 3B (N=41) used a similar approach with a choice between a pre-assembled Target table and an IKEA table requiring assembly. The success of the competence manipulation was verified by examining the performance on the math problems.

Experiment 1 found that participants who assembled the LEGO car were willing to pay significantly more than those who received a pre-assembled car. Crucially, feelings of competence mediated this effect; higher feelings of pride were associated with both building the car and a higher willingness to pay. Furthermore, while building the car increased positive affect, mood itself did not mediate the willingness to pay. Experiment 2 showed that the IKEA effect was only present in the no-affirmation condition, demonstrating that self-affirmation eliminated the overvaluation of self-created products. This supports the hypothesis that the IKEA effect is driven by a need to bolster self-esteem. Importantly, the self-affirmation manipulation did not affect feelings of competence associated with building itself, indicating a specific interaction between the need for self-affirmation and the value placed on self-created products. Experiments 3A and 3B consistently revealed that participants whose competence was threatened were significantly more likely to choose products requiring assembly, further confirming that individuals use self-creation to restore confidence and competence. In Experiment 3A, 58% in the low-competence condition preferred assembling the bookcase, compared to only 33% in the high-competence condition. Experiment 3B showed a similar pattern: 74% in the low-competence condition chose the IKEA table versus only 27% in the high-competence condition.

The findings strongly support the hypothesis that the IKEA effect arises from the feelings of competence associated with self-creation. Experiment 1 established the mediating role of pride and competence in the overvaluation of self-assembled products, while Experiment 2 demonstrated that self-affirmation eliminated this effect. Experiments 3A and 3B showed a causal link between threatened competence and increased preference for self-assembly. These results are significant because they highlight the psychological underpinnings of consumer behavior in relation to co-creation. The findings underscore the importance of self-perception and the need for self-affirmation in consumer choice. The study extends previous research on self-affirmation by demonstrating that even mundane activities, like assembling furniture, can serve as means of restoring self-esteem. The results also have implications for understanding how individuals use product choices to manage their self-image and sense of competence.

This research provides compelling evidence that the IKEA effect is driven by feelings of competence. The experiments demonstrate that competence mediates the overvaluation of self-created products and that manipulating competence influences the propensity for self-assembly. These findings extend our understanding of consumer behavior and self-perception, highlighting the psychological value consumers derive from engaging in co-creation activities. Future research could investigate the relative importance of signaling competence to oneself versus others, explore the impact of various product types on the IKEA effect, and examine the optimal strategies for firms to encourage consumer participation in co-creation while mitigating potential risks.

The studies used relatively simple products for the assembly tasks (LEGO cars and IKEA boxes). The generalizability of the findings to more complex or emotionally significant products remains to be explored. The self-report measures for competence and mood may be susceptible to response biases. Future research could employ more objective measures to strengthen the conclusions. The sample demographics in the experiments may limit the broader generalizability of these findings.