Are you harnessing the magic of DIY?

Harvard professor Mike Norton explains the surprising benefits of a “do it yourself” approach to creating things that we might otherwise buy

Since the last edition of this newsletter, the field of behavioral science has suffered a truly monumental loss. On March 27^th, emeritus Princeton psychology professor and Nobel Laureate Daniel Kahneman passed away. Danny’s work with Amos Tversky in the 1970s laid the foundations for everything I study and discuss in this newsletter, demonstrating that decision makers are poor intuitive statisticians, which leads us to make many systematic mistakes (like worrying too much about low-risk events that we can imagine vividly, e.g. shark attacks). 

While Danny was not a close friend or mentor, he was kind and generous to me on many occasions and I was truly shaken and saddened by his passing. In tribute to Danny, we re-released an episode of Choiceology featuring an interview taped years ago in his Manhattan apartment.  

In place of my usual list of recommended listens and reads about behavioral science, this month I’ve listed a range of tributes to Danny’s extraordinary legacy.

Listens and Reads in Remembrance of Danny Kahneman

• Reflections on Danny’s legacy shared in short form with NPR’s “Here and Now”

• A conversation about Danny’s pioneering work, which gave rise to the field of behavioral economics on NPR’s WHYY

• A tribute to Danny’s love of adversarial collaboration by his co-author and friend Cass Sunstein, penned for the New York Times shortly after Danny’s death

• A classic Choicelogy episode featuring Danny describing how our risk preferences change when we think about what we stand to lose versus what we stand to gain, which we re-released earlier this month with a new opening tribute to Danny

• A mosaic of memories of Danny collected by Behavioral Scientist

• A summary of how Danny’s work affected the investment world from a journalist who worked with Danny years ago and knew him well

• The bestselling book The Undoing Project by Michael Lewis, which describes Danny’s influential academic work and intellectual partnership with Amos Tversky

• A review of The Undoing Project published in the New Yorker by Danny’s friends and collaborators, Richard Thaler and Cass Sunstein

• A fireside chat between Danny Kahneman and Max Bazerman filmed at the inaugural gathering of Penn’s Behavior Change for Good Initiative

A dinner honoring Danny at the 2015 Society for Judgment and Decision Making Conference

Danny applauding our speaker at a 2019 Behavior Change for Good Initiative Conference

Q&A: The Surprising Magic of DIY

When we lose someone, rituals can be particularly important for healing. Appropriately, the Q&A I planned to share this month shines a light on the work of a Harvard professor and behavioral scientist named Mike Norton with a new book on rituals and how they can be harnessed to help you achieve your goals.  

In this Q&A from Choiceology, Mike and I discuss his research on “the Ikea effect” or the surprising magic of do-it-yourself (DIY).  

Me: What is the IKEA effect?

Mike: A few years ago, my collaborators and I realized that almost everyone we knew, including ourselves, had made something in their house. Like a bookshelf, or a watercolor, or something that was really ugly. But every time they moved, they would carefully pack it up in bubble wrap and their spouse or partner was always wondering why they had to bring this terrible thing with them.

First, we thought that's pretty silly that we all do that — we all have that special thing. And that led us to think about what happens when people make things themselves? If we make things, we actually love them enough to put them in bubble wrap and carry them around, and maybe that’s not so silly.

And of course, the first thing we thought of was everybody struggling with their IKEA furniture.

Me: Okay. So that answers my second question, which is why did you call it the IKEA effect?

Mike: Yeah. Sometimes people think it's an endorsement of a Nordic model of business, but really, we were referring to how a lot of people have IKEA furniture that's not assembled correctly. And they don't love the thing — the bookcase isn't their favorite bookcase ever — but the IKEA effect isn’t necessarily that you love the thing you made. It's that you love the thing you made more than the exact same thing made by somebody else. 

Me: I love that. Could you talk about the research you did that showed people exhibit this effect? 

Mike: The first domain that we thought of using was origami. By the way, if you ever want to do research with origami, go to MIT and put out an ad for students saying, "Are you interested in origami?" Because a lot of them are.

Me: It just opens the floodgates.

Mike: Yeah, you really get a lot of origami-aficionados. And so that was a strong test, because origami in the end is just crumpled up paper, technically speaking. Now, people who are good at it make amazingly beautiful works of art. I don't mean to say it's not incredible. And so the idea was to see if I would like my crumpled paper better than your crumpled paper.

And we tested this with monetary value. So, we had three prices in the market. One is the actual price for an expert origami. One is your price to keep the one you made yourself. And then one is other people's price for yours. 

We found that people will pay about 25 cents for the expert one and about the same for their own. So that tells us that people see their origami as being as wonderful as the market sees the expert's. 

But when we ask other people how much they’d pay for origami made by another non-expert, they say something like a nickel. And some of those people even say they just feel bad for whoever made it. Like, "Well, I didn't want to pay nothing because he went to all that trouble." And $0.20 isn't changing the world economy, but it is a 5X difference in valuation of paper just based on whether I crumpled it or you did.

Me: That’s such a clever study. Why does that happen? Why do we value the very same things more after we've put effort into creating them?

Mike: If you think about your everyday life, and at the end of the day, you say, "Did I get anything done today?" Very often the answer is, "I'm not sure." I had some meetings, and I sent some emails, but I'm not sure if I really did anything. But when you make something, even a little origami, it's evidence to yourself that you actually did a thing. This is why people make check lists, so they can feel like they crossed something off their list. Making things is a little bit like that, but it's more real because I actually have a little paper frog on my desk that shows me that I'm capable of doing something. 

The other big thing is that we imbue these things with our identity. They come to represent more than just a piece of paper. It's my creation that I worked on, and it becomes important to me.

And we do that in many ways in life. The things that we try hard on become things that we really start to value. That's a mistake, technically, because we know the paper isn't worth as much to other people as it is to you. But I don't see it as a mistake exactly, so much as it's nice that we can fold up paper, and really love it. And put it on our shelf, and look at it, and reflect on how great it is. Even if the market doesn't feel that love, there's nothing wrong with me feeling that.

Me: So you're saying you think it serves as an ego boost?

Mike: I think so, yeah. And it can go badly. We did some surveys that we never published, but we asked people who were selling their house “how much work did you do on the house yourself?” And we see that if I put in the tile backsplash myself, I think it's amazing and that the house should sell for more than if I had somebody else put in the tile backsplash. So, there you could see it going wrong, where I overvalue my house and can't sell it because of the effort I put into it.

But most of the everyday things, putting something together yourself, compared to what else would you have been doing with your time? It's probably not the worst use of your time, compared to doom scrolling, or watching TV, or something like that.

Me: I can’t help but think about the endowment effect, or people's tendency to overvalue the things that they own. Do you think the IKEA Effect relates at all to the endowment effect?

Mike: For sure. To me, the IKEA Effect is another level of it where I've not just gotten it, but I made it. And the ownership that people feel over the thing they made is even stronger than the crazy amount of ownership we feel over things people put in front of us.

Me: If someone's familiar with this research, what can it help them do better?

Mike: We want to spend less time on things that we don't want to do, or that we're not good at doing. So, I don’t know how to fix my plumbing, but I can pay somebody to fix my plumbing. And everything in life you can think about, we're trying to shift our time to things that we like doing, or that we're good at doing.

Most of us aren't so good at making things. So again, if it comes down to me making a thing or having someone else make a thing who's much better at it, as long as I have enough cash, I’m of course going to default to having someone else do it. And I think that's often very wise — you shouldn’t do electrical wiring yourself at home. But I think there are things people outsource that don't necessarily take a ton of time or expertise, and it's almost like we're leaving an opportunity for happiness on the table. We could just make a few more things ourselves and get these great experiences of ownership and joy.

For example, when I teach executive education, I give executives sets of Legos that are meant for three-year-olds and I have them build something. And then I say, "Okay, can you please pass them forward, because I need to take them apart so I can use them for the next class." And these men and women, they put their arms protectively around their Legos, and they're infuriated, and they won't give them back to me.

These are people who could buy the Lego Corporation. So, it's not that they can't afford Legos. It's that it doesn't occur to them to do something like buy a Lego set that they can make themselves and really love it. When we follow up with these executives a month later, they still have the Lego set on their desk at work because they're still getting happiness out of it.

Me: That's really interesting. It seems what you're saying is when you make it yourself, a thing becomes an experience.

Mike: I love that idea. And I think that when people hear that experiences are better than stuff, it really resonates. But I think people often think about things like vacation, or going out to dinner, those sorts of experiences. But there's some experiences that can be a little bit painful or hard, like having to put an IKEA bookshelf together yourself. But the hardness is actually one of the things that makes us really value it.

Me: Last question. Is there anything you do differently in your own life as a result of having done this research?

Mike: I do. When I'm not endangering anybody, I don’t outsource things as much as I once did. I make things and scatter them about my office or home, and it makes me happy to have them scattered about. Not six-week construction projects, but little projects that become a part of you in a way that lots of the other things we spend time on don't resonate.

Me: That’s wonderful. And I do appreciate your prescription to avoid endangering anyone.

Mike: Yeah, I'm not legally liable, I should say out loud. If anyone does try to rewire their home.

This interview has been edited for clarity and length. 

To learn more about Mike’s work on the IKEA effect, listen to the episode of Choiceology where we dig into the topic or check out his fantastic new book, The Ritual Effect.

That’s all for this month’s newsletter. See you in May!

Katy Milkman, PhD

Professor at Wharton, Host of Choiceology, an original podcast from Charles Schwab, and Bestselling Author of How to Change

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