The Decoy Effect

The Decoy Effect

Imagine you’re going to the cinemas, and before taking your seats, you buy a box of hot, buttery popcorn.

Here, you've only got two options. A small for $3 or a large for $7.

Which one do you choose?

More often then not, you'll choose the small option for $3.

“The large option just isn't worth it.”

$7 feels like a huge rip-off.

But what if we added another option...

A medium for $6.50

If I asked the same question again, most people would buy the large for $7.

“For only 50 cents, I get a large over a medium!”

$7 suddenly provides great value.

This is the Decoy Effect

Here, a decoy has been used to alter your decision making in order for you to buy a large.

The decoy makes it seem like buying the $7 option is ‘worth it’ for its price.

But if the decoy wasn’t there, most people would have bought the small for $3.

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Source: The Decoy Effect

This example is courtesy of National Geographic