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The Economics of IKEA: Why Does Labor Lead to Love? (VIDEO)
The Swedish company IKEA is famous across the globe for its meatballs and its wide array of furniture that customers must assemble at home. This video explains the behavioral psychology behind the “IKEA effect” with its winding floor plan that causes customers to snake through a series of product showrooms.
Discussion/Questions:
- What sort of strategies does IKEA use to keep costs low?
- How does the “IKEA effect” encourage customers to purchase furniture and home goods?
Sources: WSJ.com The Economics of IKEA. Photo by Alexander Isreb from Pexels.