Both inflate how much you value something, but the endowment effect is triggered by mere ownership, while the IKEA effect is triggered by the effort you put into making it.
| The endowment effect | The IKEA effect | |
|---|---|---|
| What it is | Valuing something more because you own it | Valuing something more because you built or assembled it |
| The trigger | Possession alone | Labor and effort invested |
| Example | Asking more to sell your mug than you'd pay to buy an identical one | Loving the wobbly shelf you assembled more than a nicer bought one |
If merely owning something makes you overvalue it, that's the endowment effect. If it's the effort you put into making it that inflates the value, that's the IKEA effect. Ownership alone triggers one; effort triggers the other — and they often stack.
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