The Decoy Effect: How Irrelevant Options Change Preferences

The Decoy Effect: How Irrelevant Options Change Preferences You are at the movies deciding between a small popcorn for 3 dollars and a large for 7 dollars. Then you notice a medium for 6.50 dollars. Nobody buys the medium -- it is obviously a bad deal. But suddenly the large seems like a bargain. Congratulations, you have just been influenced by the decoy effect. What Is the Decoy Effect? The decoy effect, also called the asymmetric dominance effect, occurs when the introduction of a third option changes the preference between two original options. The third option (the decoy) is designed to be inferior to one option but not the other, making the target option appear more attractive by comparison. The decoy is not meant to be chosen. Its purpose is to shift preference toward the option the seller wants you to pick. This is not accidental -- it is a deliberate pricing and product strategy used by businesses worldwide. How the Decoy Effect Works The mechanism relies on comparative evalua