Decoy effect
An option that is worse than another in every or nearly every way, but not worse than the third, makes that other one look better and get chosen more.
What problem it addresses
It explains why adding a worse option can change which of the others we choose, something classical choice theory does not predict.
An example
An illustrative example: a movie theater sells small popcorn for $3 and a large, twice the size, for $7. Then it adds a medium, much smaller than the large, for $6.50.
The medium hardly sells, but it isn’t there to sell: it’s there to make the large look cheap.
Why it happens
Comparing different options is hard. Is $4 more worth twice the popcorn?
The decoy offers an easy comparison. Almost the same price, quite a bit less popcorn.
We choose the one that wins that comparison, even if it wasn’t our favorite at first.
Applications in design
Use it like this
Highlight the option that truly suits people and explain why it is better than the others.
Avoid
Making up trap options whose only purpose is to push toward the most expensive one.
Don’t fall for it
Cover up the option you would never choose and decide again. If you change your mind, it was a decoy.
32% → 84%
What the research says
MIT students who chose the full subscription to The Economist without and with the decoy (Ariely, 2008).
Debated evidence. It works well with clear numbers, but weakens with real products (Frederick, Lee and Baskin, 2014).
Connections
Used in
Authors and works
- 1982
Joel Huber, John Payne and Christopher Puto
Demonstrated it with an option that is worse than one other in every way and only partly worse than the third.
- 2008
Dan Ariely
Popularized it with the example of subscriptions to The Economist.
Sources
Original sources
- Huber, J., Payne, J. W., & Puto, C. (1982). Adding asymmetrically dominated alternatives: Violations of regularity and the similarity hypothesis. Journal of Consumer Research, 9(1), 90–98. View source: Huber, J., Payne, J. W., & Puto, C. (1982)
- Ariely, D. (2008). Predictably irrational: The hidden forces that shape our decisions. HarperCollins.
- Frederick, S., Lee, L., & Baskin, E. (2014). The limits of attraction. Journal of Marketing Research, 51(4), 487–507. View source: Frederick, S., Lee, L., & Baskin, E. (2014)
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