Decoy EffectOpen Access

Decoy Effect

We’re more likely to buy B over A by adding C to make B look more attractive

Every product added to a range affects the comparative value and choice made between the products. Used well, decoys are highly persuasive.

Huber et al. (1982). Adding asymmetrically dominated alternatives: Violations of regularity and the similarity hypothesis. Journal of Consumer Research.

The study

Setup

153 people were asked to choose between a 5-star restaurant 25 mins away and a 3-star restaurant 5 mins away. A third decoy restaurant option was then added of 4-stars  at 35 mins away.

Results

This decoy shifted preferences from the closer, cheaper restaurant towards the 5-star option.

Study graph

Key Takeaways

Determine your target.

What is the product you want to sell more of, next to a lower-margin competing product? Build your decoy product around this with a price or attributes that inadvertently highlight the target's attractiveness.

Takeaway image

Don't overwhelm.

Offering too much choice or highlighting too many competing attributes where neither option is clearly more attractive will trigger Analysis Paralysis, making consumers' decision processes more difficult.

How is your target clearly more attractive?

Takeaway image

Test different decoy values to optimize the effect.

Huber et al., (2014) suggest that decoys work best when it’s really easy and quick to see the dominant product, when pre-decoy desire is roughly split between target and competitor and when people don’t strongly like / dislike the decoy.

Takeaway image
Takeaway image
Decoy Effect

Decoy Effect

We’re more likely to buy B over A by adding C to make B look more attractive

Every product added to a range affects the comparative value and choice made between the products. Used well, decoys are highly persuasive.

The study

Setup

153 people were asked to choose between a 5-star restaurant 25 mins away and a 3-star restaurant 5 mins away. A third decoy restaurant option was then added of 4-stars  at 35 mins away.

Results

This decoy shifted preferences from the closer, cheaper restaurant towards the 5-star option.

study graph
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