The Decoy Effect
Have you ever wondered why fast-food chains offer so many choices? All you want is a hamburger, but there are a dozen to choose from. Something is going on here, but you don’t know what it is. It could be the “decoy effect.”
The term “decoy effect” describes what happens to the way you make decisions about what to buy when there are more than two choices. With only two choices, you will probably make a decision based on which looks better. But when you are offered a third choice priced between the original two (a “decoy”), you are likely to take longer and finally choose the more expensive one.
Here is how that works. You are at a movie theater, and you want popcorn. The theater offers you two choices: a small bucket for $3 or a large one for $7.
Most people choose the small bucket.
But suppose that there are three choices: a small bucket for $3, a large one for $7, and a medium one (the decoy) for $6.50.
Now, most people will choose the large bucket. They figure they get a lot more popcorn for only 50 cents. The large bucket looks like the best deal.
The decoy effect is an example of a “nudge”—a little change that steers you toward a certain choice. The decoy popcorn bucket “nudges” you to buy more popcorn—and spend more money.
The decoy effect does not violate your free will, because it doesn’t make you buy the bigger size. However, because of this nudge, the theater will sell more popcorn and make more money.
What makes the decoy effect so powerful is that you think that you are choosing independently and making a wise decision. You are influenced without even realizing it.
You believe that you make all of your own decisions freely. In reality, however, you are often being influenced by factors like the decoy effect which you are unaware of.
Have you ever wondered why fast-food chains offer so many choices? All you want is a hamburger, but there are a dozen to choose from. Something is going on here, but you don’t know what it is. It could be the “decoy effect.”
The term “decoy effect” describes what happens to the way you make decisions about what to buy when there are more than two choices. With only two choices, you will probably make a decision based on which looks better. But when you are offered a third choice priced between the original two (a “decoy”), you are likely to take longer and finally choose the more expensive one.
Here is how that works. You are at a movie theater, and you want popcorn. The theater offers you two choices: a small bucket for $3 or a large one for $7.
Most people choose the small bucket.
But suppose that there are three choices: a small bucket for $3, a large one for $7, and a medium one (the decoy) for $6.50.
Now, most people will choose the large bucket. They figure they get a lot more popcorn for only 50 cents. The large bucket looks like the best deal.
The decoy effect is an example of a “nudge”—a little change that steers you toward a certain choice. The decoy popcorn bucket “nudges” you to buy more popcorn—and spend more money.
The decoy effect does not violate your free will, because it doesn’t make you buy the bigger size. However, because of this nudge, the theater will sell more popcorn and make more money.
What makes the decoy effect so powerful is that you think that you are choosing independently and making a wise decision. You are influenced without even realizing it.
You believe that you make all of your own decisions freely. In reality, however, you are often being influenced by factors like the decoy effect which you are unaware of.