Asymmetric dominance or decoy effect

Asymmetric dominance or decoy effect

Asymmetric dominance or decoy effect is an interesting psychological phenomenon used in marketing by which customers tend to make irrational purchase decisions depending on the choices they are shown. If we have options A and B, and customers would rather A, it is possible to include a third option (the “decoy”) that will be similar to B but clearly disadvantageous. When C is included, customers prefer B. We can see it in the following specific example, taken from a real experiment:

Small popcorn: $3

Big popcorn: $7

In this scenario, customers picked the small popcorn. Then a new option, the decoy, was introduced:

Small popcorn: $3

Medium popcorn: $6.50

Big popcorn: $7

When faced with this new set of options, customers began to choose the big popcorn. The asymmetric dominance or decoy effect happens because for us it is difficult to make decisions between alternatives that have several factors to consider (size and price), but when we find a clear advantage between two options (medium or big popcorn), that catches our attention. Even when the decoy is never chosen, its inclusion affects the result. Here we have another example:

Online newspaper subscription: $5

Paper newspaper subscription: $15

Paper newspaper subscription (+ online edition for free): $15

In this case the second option might seem irrelevant, but in fact makes the most expensive product more attractive.

The asymmetric dominance or decoy effect is a psychological bias that works not only for marketing and advertising, but also applies to any kind of choice we make in our daily lives. For instance, it is possible to make any person look more beautiful just by putting them next to a “decoy” who looks alike but is slightly less attractive!

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