Decoy Effect 👣
🧠Psych - 89 / 100
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Now, let’s talk about Decoy Effect👣.
What is it?
In marketing, the decoy effect is the phenomenon whereby consumers will tend to have a specific change in preference between two options when also presented with a third option that is asymmetrically dominated. [1]
Examples -
This image courtesy goes to this website which also has a great article on it.
Where does it occur?
Companies use it on many instances a third option (which might be really be needed) to trick you into this effect.
This effect can also be seen in instances of Dating as well as Politics. [3]
Why do I need to know?
The decoy effect is an example of the violation of the independence of irrelevant alternatives axiom of decision theory.
More simply, when deciding between two options, an unattractive third option can change the perceived preference between the other two.
Takeaways: -
When a decoy option is presented effectively, we tend to make decisions based on what appears to be the best choice, and not on which option best meets our needs.
References & Studies: -
http://en.wikipedia.org/wiki/Decoy_effect
https://www.crowdspring.com/marketing-psychology/decoy-effect/
https://thedecisionlab.com/biases/decoy-effect/#section-10
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