Template-Type: ReDIF-Paper 1.0
Title: MyPortfolio: The IKEA Effect in Financial Investment Decisions
Author-Name: Fabian Brunner
Author-Email: brunner@bwl.uni-mannheim.de
Author-Name: Fabian Gamm
Author-Email: gamm@bwl.uni-mannheim.de
Author-Name: Wladislaw Mill
Author-Email: mill@uni-mannheim.de

Classification-JEL: C91, G11, G41, G50
Keywords: IKEA Effect, Self-Building Financial Portfolios, Self-directed Investing, Investment
Decisions, Psychological Ownership, Belief Formation, Experimental Finance

Abstract: Creating your own financial portfolio has never been easier than today. While recent literature
shows that people overvalue self-built consumer goods ("IKEA effect") we ask the
following question: How do investors value and trade a self-built versus a not self-built financial
portfolio? Our pre-registered experimental design allows us to rule out any confounding
customization, actual ownership, or learning effects. We find that self-building a portfolio
significantly increases corresponding attachment. However, neither valuation of the portfolio
nor trading decisions are affected. Thus, our precise estimates suggest that there is no
economically relevant "IKEA effect" in Financial investment decisions. These results indicate
that common portfolio self-building opportunities per se do not directly distort financial
markets.

Note: 
Length: 69
Creation-Date: 2022-03
Revision-Date: 
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp349
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2022_349