Decoy Effect

Decoy Effect

What is it?

Decoy Effect is a bias that makes people choose an option when a decoy option is presented.

The Decoy Effect, also known as the attraction effect, is a cognitive bias that occurs when people's preferences between two options change in the presence of a third, less desirable option (the decoy). The decoy is strategically designed to make one of the original options more attractive, influencing people's decision-making.

Here are two simple examples to help you understand the Decoy Effect:

  1. Movie snacks: Imagine you're at a movie theater and see two popcorn sizes: a small for $3 and a large for $7. You might be unsure which one to choose. Now, the theater introduces a medium size for $6.50. Suddenly, the large popcorn seems like a better deal compared to the medium, as it's only $0.50 more for a significant size increase. The medium popcorn, which is the decoy, makes the large size more appealing, and you're more likely to choose it now.

  2. Subscription plans: Suppose a streaming service offers two plans: a basic plan for $5 per month with limited features and a premium plan for $15 per month with all features. You might be undecided between the two. The company then introduces a third plan, a "standard" plan for $12 per month with only a few extra features compa ...