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The ‘IKEA Effect'

Why consumers value things more when they help build them.

Blog Video Econ Everyday Higher Education Behavioral Economics Costs and Production

The Swedish company IKEA is renowned worldwide for its wide array of furniture that customers are required to assemble at home. This video will explore the behavioral psychology behind the 'IKEA effect' and the strategies that the company has employed to become the largest furniture retailer in the world.

Discussion Questions:

  1. What sort of strategies does IKEA use to keep costs low?
  2. How does the “IKEA effect” encourage customers to purchase furniture?

Source: YouTube: https://www.youtube.com/watch?v=tkfq__rdoD0

Author: Kristen Zaborski