The decoy effect, also known as the asymmetric dominance effect or the attraction effect, is a cognitive bias that influences decision-making. It occurs when the introduction of a third, less desirable option affects the preference between two existing options. The decoy option is strategically designed to make one of the existing options more attractive by comparison.
The decoy effect leverages people's tendency to compare choices rather than evaluate them independently. When presented with two options, individuals may find it challenging to make a decision because they lack a clear basis for comparison. However, introducing a decoy option that is inferior to one of the existing options can create a contrast effect.
The decoy is carefully constructed to be less appealing than one of the original options but more appealing than the other. This manipulation causes individuals to perceive the initially less attractive option as more attractive in comparison to the decoy. Consequently, the decoy's presence nudges people towards selecting the option that benefits from the contrast effect.
The decoy effect has been observed in various domains, including marketing, consumer behavior, and politics. It is commonly used in pricing strategies, product positioning, and advertising campaigns to influence consumer choices. By strategically introducing a decoy, businesses can steer customers towards purchasing certain products or services, maximizing their profits.
It is important to note that the decoy effect is a form of cognitive bias that can exploit people's decision-making processes. Being aware of this effect can help individuals make more informed and objective choices, ensuring that their decisions are not unduly influenced by manipulated options.
