Bolstering and restoring feelings of competence via the IKEA effect

We examine the underlying process behind the IKEA effect, which is defined as consumers' willingness to pay more for self-created products than for identical products made by others, and explore the factors that influence both consumers' willingness to engage in self-creation and the utility that they derive from such activities. We propose that creating products fulfills consumers' psychological need to signal competence to themselves and to others, and that feelings of competence associated with self-created products lead to their increased valuation. We demonstrate that the feelings of competence that arise from assembling products mediate their increased value (Experiment 1), that affirming consumers' sense of self decreases the value they derive from their creations (Experiment 2), and that threatening consumers' sense of self increases their propensity to make things themselves (Experiments 3A and 3B).

► We examine the role of feelings of competence in co-creation and the IKEA effect.
► Feelings of competence drive the premium attached to self-made products.
► Manipulating feelings of competence affects consumers' propensity to co-create.
► We show that even mundane products can have implications for consumers' identities.