The decoy effect, also known as the asymmetric dominance effect, is a cognitive bias that occurs when individuals’ preferences between two options are influenced by the introduction of a third, less attractive option. The presence of the “decoy” option can lead people to choose one of the other options they might not have chosen otherwise.
Explanations:
The decoy effect is based on the principle of relativity and the way people make decisions by comparing available options. When a less attractive third option is introduced, it can make one of the original options seem more appealing by comparison.
Examples:
Product Pricing: In a restaurant, a menu might include a high-priced steak and a lower-priced chicken dish. The addition of a third, overpriced fish option can make the steak seem like a more reasonable choice.
Subscription Plans: A streaming service might offer a basic, lower-priced plan and a premium, more expensive plan. The introduction of a middle-tier plan with fewer features can influence subscribers to choose the premium plan.
Job Offers: A job candidate might be deciding between two job offers. The introduction of a less attractive third offer can make one of the original two offers more appealing.
Solutions:
Awareness: Be aware of the decoy effect and how it can influence your decisions.
Evaluate Options Independently: Consider each option on its own merits rather than relying solely on comparisons.
Research and Information: Seek additional information and research about the available options to make more informed decisions.
Decision Frameworks: Use decision-making frameworks that consider your goals and preferences rather than relying solely on the influence of the decoy effect.
Addressing the decoy effect involves recognizing the influence of the less attractive third option on decision-making and actively promoting awareness, independent evaluation, research, and the use of decision-making frameworks to make more balanced and informed choices.