What is the decoy or attraction effect and how to overcome it

You know how mar­keters are always try­ing one way or anoth­er to get you to buy stuff? Well, this is one of the tech­niques they use.

The attrac­tion or decoy effect is a wide­spread psy­cho­log­i­cal effect used by mar­keters to push con­sumers to buy more expen­sive prod­ucts. An exper­i­ment by Nation­al Geo­graph­ic (two min­utes) shows it in action:

They start­ed with two groups of movie­go­ers, A and B:

  • They offered two options to Group A: a small sized pop­corn for $3 and a big sized pop­corn for $7. The major­i­ty choos­es the small option.
  • To group B, they offered a new option: a medi­um-sized pop­corn for $6.5. And just like that, almost every­one went for the big­ger size.

With just a small addi­tion and no changes to the orig­i­nal sizes, con­sumers changed their choice to the most expen­sive one. Intrigu­ing! Hav­ing a frame of ref­er­ence enabled cus­tomers to see val­ue in more pop­corn at only $.05 more.

More examples of decoys in action

A study by Joel Hubert 1 shows how this effect is present in our every­day life.

When you go to the store:

” Con­sid­er going into a store and find­ing [a] large range of shirts in one style and … a nar­row range in anoth­er. If one wished to be in fash­ion one might jus­ti­fi­ably infer that the shirt with few items sim­i­lar to it is less pop­u­lar this sea­son and thus be like­ly to buy it.”

Or when you sign up to a news­pa­per:

The only role of the basic $125 sub­scrip­tion is the make the mid­dle option more valu­able.

How to identify the effect

When­ev­er you have a choice to make between three prod­ucts, the decoy effect is poten­tial­ly in place.

  • If a product’s pric­ing doesn’t make sense (i.e: an mp3 play­er being more expen­sive and hav­ing less capac­i­ty than anoth­er)
  • If a product’s pric­ing just seems to be mak­ing anoth­er prod­uct bet­ter. 

If 1 or 2 apply, then chances are the prod­uct is a decoy meant to nudge you toward buy­ing the high­est priced option.

How can I fight back?

The only win­ning move is not to play. If you don’t buy any­thing, then you over­come the bias every time. But unless you are a Bud­dhist monk, this isn’t like­ly to be your case.

So for the rest of us who need to buy things from to time, here’s a sim­ple method. When you go buy some­thing, and there are three options, iden­ti­fy the decoy (if there is one) and men­tal­ly dis­card it. Instead, com­pare the prod­ucts as if there were only two options.

By doing so, you remove the bias and are able to make com­par­isons with a clear mind.

Have you encoun­tered the decoy effect in your own life? 

  1. http://www.dtic.mil/cgi-bin/GetTRDoc?AD=ADA101132

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