Decoy Effect

Decoy Effect

Decoy Effect Jonathan Poland

The decoy effect is a cognitive bias that occurs when people make choices based on the relative attractiveness of options. When faced with a list of options, the presence of an obviously inferior option, known as a “decoy,” can influence people’s decisions. For example, a marketer may include a decoy option in a price list to make the other options appear more appealing. This can lead to a higher conversion rate, as customers compare the options and choose the better deal, feeling more confident about their decision.

The decoy effect is a well-known phenomenon in psychology and marketing, and it has been studied extensively. Research has shown that the decoy effect can be highly effective in influencing people’s choices, even when they are aware of it. This is because the human brain is wired to make decisions based on relative comparisons, rather than absolute values.

Overall, the decoy effect is a powerful tool that can be used to influence people’s decisions. By including a decoy option in a list of choices, marketers can make the other options appear more attractive and increase the likelihood of a sale.

Here are a few examples of the decoy effect in action:

  • A restaurant offers three meal options: a budget-friendly meal, a premium meal, and a decoy meal that is more expensive than the premium meal but offers fewer options and less value. Customers are more likely to choose the premium meal because it appears like a better deal compared to the decoy meal.
  • A clothing store offers three shirt options: a basic shirt, a premium shirt, and a decoy shirt that is more expensive than the premium shirt but offers fewer features and lower quality. Customers are more likely to choose the premium shirt because it appears like a better deal compared to the decoy shirt.
  • A travel website offers three vacation packages: a budget-friendly package, a premium package, and a decoy package that is more expensive than the premium package but offers fewer amenities and less convenience. Customers are more likely to choose the premium package because it appears like a better deal compared to the decoy package.

These are just a few examples of how the decoy effect can be used to influence people’s choices. The specific use of the decoy effect will depend on the context and the goals of the person using it.

Learn More
Efficiency Jonathan Poland


Efficiency is a measure of how well resources are used to produce goods and services. It is typically calculated by…

Customer Convenience Jonathan Poland

Customer Convenience

Customer convenience refers to any aspect of the customer experience that makes it easier and more efficient for them. This…

Media Analysis Jonathan Poland

Media Analysis

Media analysis is the study of the structure, content, and methods of communication in various forms of media. This involves…

Productivity Rate Jonathan Poland

Productivity Rate

Productivity rate is a measure of the efficiency with which a company or organization produces goods or services. It is…

Yield Management Jonathan Poland

Yield Management

Yield management is a pricing strategy used by businesses that offer access to fixed-capacity assets, such as airline seats and…

Talent Development 150 150 Jonathan Poland

Talent Development

Talent development is a critical aspect of organizational growth and improvement, and it focuses on the processes, strategies, and practices…

Customer Needs Jonathan Poland

Customer Needs

Customer needs are the factors that make a product or service valuable to a customer. These needs can be functional,…

Economic Opportunity Jonathan Poland

Economic Opportunity

Economic opportunity refers to the support that a society provides to individuals that enables them to thrive in the economy.…

What is Stagflation? Jonathan Poland

What is Stagflation?

Stagflation is a period of high inflation, low economic growth and high unemployment. Stagflation is a economic phenomenon in which…

Content Database

Search over 1,000 posts on topics across
business, finance, and capital markets.

In-Store Marketing Jonathan Poland

In-Store Marketing

In-store marketing refers to the use of physical retail locations, such as stores and showrooms, as a platform for marketing…

Data Architecture Jonathan Poland

Data Architecture

Data architecture refers to the principles, structures, standards, controls, models, transformations, interfaces, and technologies that define how data is stored,…

What is an Intermediary? Jonathan Poland

What is an Intermediary?

An intermediary is a person or organization that acts as a go-between or intermediary for two or more parties in…

Market Development Jonathan Poland

Market Development

Market development is the process of entering new markets to expand revenue and reduce concentration risk. It involves identifying and…

How does a plane fly? Jonathan Poland

How does a plane fly?

A plane flies due to a combination of four fundamental forces: lift, weight (gravity), thrust, and drag. These forces work…

Remarketing Jonathan Poland


Remarketing is a marketing strategy that involves targeting customers who have previously interacted with a business. This is often done…

IT Architecture Jonathan Poland

IT Architecture

An IT architecture is a framework that describes the components of an information technology (IT) system, how they work together,…

Customer Analysis Jonathan Poland

Customer Analysis

Customer analysis involves systematically examining and understanding the characteristics, needs, motivations, and decision-making processes of a target market. This process…