Have you ever wondered why you often end up choosing the more expensive option at a restaurant or the larger size of a product, even when it may not be the best value for your money? Well, let us introduce you to the powerful persuasion technique which plays with the psychology of the customers known as the Decoy Effect.

The Decoy Effect is a clever strategy used by marketers to influence your decision-making process by presenting you with a third option, also known as the “decoy.” This decoy is strategically designed to make the option they want you to choose more appealing in comparison.

How exactly does decoy work?

We often believe that having more choices will make decisions easier. However, the truth is that having too many options can actually make us feel overwhelmed and worried about making the “wrong” decision. We become anxious which makes it more difficult for us to make any decision at all.

Decoy takes advantage of our natural tendency and guides us towards a choice that is both better in quality and higher in price, while making us believe that we are making a logical and well-informed decision.

Usually, we don’t even realize that decoys have any impact on our choices; whatever we ultimately choose, we believe that we’re doing so independently

The Decoy Effect is mostly hidden, and that’s why it holds such strong influence over us.  Picture this: you’re planning a weekend getaway and need to book a bus ticket, You’re presented with two options:

A standard ticket for ₹1000 (back seats)

A premium ticket for ₹1700 (front and middle seats with or without window as per your preference)

The business class ticket seems a bit pricey, so you’re leaning towards the standard option. But then, the bus company throws in a decoy:

A classic ticket for ₹1600 (front and middle seats without window)

So now you have 3 options –

A standard ticket for ₹1000 (back-end seats)

A classic ticket for ₹1600 (front and middle seats without window)

A premium ticket for ₹1700 (front and middle seats with or without window as per your preference)

Decoy Effect

Suddenly, the premium ticket appears to be a fantastic deal because it’s just ₹100 more than the classic ticket, while the standard ticket seems like a bit of a downgrade.

The Decoy Effect works by exploiting our tendency to compare options and make relative judgments. When we have two options, it can be challenging to evaluate their worth objectively. However, when a decoy is introduced, it changes the context and makes the desired option more attractive by altering our perception of its value.

Let’s say you’re craving some popcorn at the movie theatre, and you’re faced with two options:

A small size for ₹250 and

A large size for ₹500

The large size seems quite expensive, so you lean towards the small size. However, the clever marketer introduces a decoy:

A medium size for ₹450

Now you have 3 options –

A small size for ₹250 and

A medium size for ₹450

A large size for ₹500

pop corns

Suddenly, the large size seems like a better deal because it’s only ₹50 more expensive than the medium size. The decoy creates a perception of value for the large size and nudges you towards choosing it.

Add a decoy and you can shift what feels like a good deal in a flash. In fact, there’s evidence that a well-designed decoy can shift preference  between the other two options by as much as 40%. Do it well and people won’t even realize that their decision-making is being manipulated, instead, they’ll feel like they’re making the logical choice.

The decoy effect is like a flashlight that helps us see the interesting and complex aspects of decision-making. By understanding how the decoy effect works, businesses can design their products or services in a way that influences customers to choose certain options over others.

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