IKEA Effect
The IKEA effect is valuing something more because you built it yourself, regardless of how well it actually turned out.
Full definition of IKEA Effect →:: COMPARE ::
IKEA effectvsSunk cost fallacy
The short answer
Both make you cling, at opposite ends of a project. Sunk cost keeps you funding something unfinished and failing; the IKEA effect makes you overprice something finished and mediocre. Tellingly, the IKEA effect vanishes if the build is abandoned — the exact condition where sunk cost is strongest.
Side by side
| Aspect | IKEA effect | Sunk cost fallacy |
|---|---|---|
| Requires | Completion | Unrecoverable spend |
| Object | A finished thing | An ongoing commitment |
| Produces | Overvaluation | Continued investment |
| If abandoned | Disappears | Intensifies |
What each one means
Sunk Cost Fallacy
The sunk cost fallacy is the pull to keep spending money, time or effort on something because of what you've already put in — even when none of it can be recovered and stopping would leave you better off.
Full definition of Sunk Cost Fallacy →