6.7
The Decoy Effect
Adding a deliberately worse third option to a choice set so that buyers move toward the option you want them to take.
Huber, Payne & Puto (1982) as asymmetric dominance; popularised through Dan Ariely's Economist subscription example
What it does
Gives a pricing page a reason to carry an option nobody is expected to buy. Where it works, it works by making one option easy to justify rather than by changing what anyone wants — the decoy supplies the comparison that makes the target look like the sensible choice.
When it breaks
It breaks under replication. Large-sample and field attempts have repeatedly failed to reproduce the effect outside the original narrow stimulus designs, and where it does appear the size is far below what pricing-page advice implies. It also assumes buyers evaluate the set as a set, which is not how most purchases happen. The practical risk is not a null result — it is a live pricing page carrying a real option that some customers will actually buy, at a price you set to be unattractive.
Case
A controlled domain replication of the prize-decoy experiment reported in the Journal of Economic Psychology found evidence against the asymmetric dominance effect in that setting, and the authors discuss why replication has repeatedly failed where the original demonstrations succeeded.
Prize decoys at work — new experimental evidence on asymmetric dominance, J. Economic Psychology ↗Diagram — not yet drawn
Three price options with the decoy shaded; underneath, the share of buyers actually choosing each, with the decoy's non-zero slice picked out as the cost nobody plans for.
In the wild
Unvetted · not part of the tier assessment
What has been written about this tool in the last twelve months. Machine-retrieved and unchecked — everything above this line was checked.
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