Skip to content
APDD
See my library

Concept

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.

In Spanish
Efecto señuelo
Origin
Huber, Payne and Puto (1982)

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.

Without a decoy$3Small$7Large
You compare $3 with $7. The large looks expensive.
With a decoyonly $0.50 more$3Small$6.50Medium · decoy$7Large
You compare $6.50 with $7. The large looks like a bargain.

The medium hardly sells, but it isn’t there to sell: it’s there to make the large look cheap.

Why it happens

  1. Comparing different options is hard. Is $4 more worth twice the popcorn?

  2. The decoy offers an easy comparison. Almost the same price, quite a bit less popcorn.

  3. 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%

Without decoyWith decoy

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).

Authors and works

  1. 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.

  2. 2008

    Dan Ariely

    Popularized it with the example of subscriptions to The Economist.

Sources

Original sources

Last reviewed: