Decoy Effect

What is the decoy effect?

The decoy effect, or attraction effect, is a change in choice caused by adding an option that is clearly inferior to one existing option but not inferior to the other in the same way. That relationship is called asymmetric dominance.

Decoy Effect Example

Huber, Payne, and Puto’s original choice experiments showed that such an addition can increase selection of the option that dominates it. For example, a product with the same features as one option but a higher price may make that original option easier to favor over another option with different strengths and weaknesses.

Decoy effect in marketing

A marketer might place a worse-value option beside the product they want a customer to choose. But “worse value” has to follow the comparison above: an unattractive third option alone is not enough. Whether it changes sales depends on the offer and how customers compare the choices.