The Investment Illusion: Why Effort Makes Us Value Products and Habits More Than We Think
In a curious experiment, college students assembled origami animals—cranes and frogs—following tricky instructions. Afterward, these same students were asked how much they’d pay to keep their haphazard creations. Their valuations were five times higher than those by onlookers who hadn’t participated in the building. This “IKEA effect”—named after the furniture you assemble yourself—demonstrates a deep truth: we irrationally value our own labor and tiny acts of investment.
Behavioral researchers consistently find that any investment—time, effort, social input—creates a subtle bond between person and activity. That’s why apps that prompt you to rate, customize, bookmark, or share after a positive interaction end up increasing loyalty. Each interaction is a tiny sunk cost, and humans naturally seek to be consistent with past behavior. Psychology calls this the ‘commitment effect,’ and it shows up in scenarios as varied as gym attendance to video game loyalty.
Products designed to capitalize on this effect routinely nudge users to make small investments just after a reward phase. Think of saving your music playlist, adding a friend, or organizing your feed. Even in personal routines, journaling after a good workout or writing down takeaways after studying can reinforce a positive cycle.
Perhaps most striking: the more effort you put in, the higher the perceived cost of abandoning your progress. This explains why people stay with a particular tool, brand, or community, even when others are objectively better or newer—our personal investment locks in preference. Rationally, effort should be a cost, but psychologically, it becomes an asset.
Think of ways you already invest in your habits—a scrapbook, a favorite app, or even a carefully organized desk. Each time you add a small piece of yourself, you raise its value and your commitment, even if you don’t realize it. Next time you enjoy a positive outcome, take a moment to add a note, a bookmark, or a little customization. Not only does this cement your progress—it makes you far more likely to loop back again and again.
What You'll Achieve
You will grow in discipline and stickiness for new habits, deepen your sense of ownership over projects or tools, and gently lock in future motivation through past effort.
Add Small Investments That Lock In Future Value
List moments where you put effort into tools or routines.
This could be updating a playlist, organizing notes, commenting on a group chat, or customizing a workspace.
Connect each investment to its impact on value.
Notice how each action—however small—makes you more likely to stick with that product, tool, or habit.
Evaluate how you can make people invest in small, meaningful ways.
In your product or in your own life, look for opportunities to request small input (writing, organizing, sharing), especially after a positive experience.
Reflect on how 'storing value' changes your commitment.
When you’ve put something personal into an activity or product, you feel a resistance to switching or giving up.
Reflection Questions
- Which of my routines or products have I shaped through personal investment?
- How does adding something of myself make quitting feel harder?
- What small investments could I encourage to boost engagement in teams or among peers?
Personalization Tips
- Learning: Highlighting and annotating a digital textbook makes you review and recall content more often.
- Social: Adding friends or followers to a new app builds subtle pressure to keep returning.
- Work: Customizing your project dashboard with colors and categories makes it your own.
Hooked: How to Build Habit-Forming Products
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