IKEA vs Trophy effect – an experimental comparison

Abstract

Purpose What if companies try to combine the IKEA and Trophy winner effects? The purpose of this study is to understand the similarities and differences between both effects. This is not only theoretically but also practically important for the way that companies interact with their customers. Design/methodology/approach Successful work – invested either to create or to obtain a product – increases the customers’ valuation of the product. This phenomenon known as the IKEA or Trophy winner effect. This study directly compares both effects using experiments with two different products (paper planes and 3D puzzles). Moreover, this study tests whether they reinforce each other. Findings The Trophy winner effect looms larger than the IKEA effect for inexpensive items. For slightly more expensive products, this study finds a Trophy loser effect. Positive emotions of trophy winners drive the results for inexpensive products, whereas negative emotions of trophy losers drive the results for slightly more expensive products. Research limitations/implications The relevance of the IKEA and Trophy effects is influenced by the type of product. Customers’ labor invested in the product itself is of greater importance the more expensive the product is. As soon as customers interpret the interaction with other customers as competition, the effect on valuation can be substantial even for inexpensive products. Future studies could try to replicate our results with different product categories. Originality/value Although the IKEA and Trophy effects are no new phenomena in consumer psychology and behavioral economics, they have not been compared to each other or combined yet. The results are useful for researchers and practitioners alike. They yield implications for product customization and customer empowerment.