Decoy effect

Imagine you are in a candy store and have to choose between two types of candy: lollipops and gummy bears. You really like gummy bears but are not sure which one to pick. Then, you notice a third option - a pack of both lollipops and gummy bears. The price of this pack is slightly higher than just buying gummy bears alone.

Now, you think harder and try to compare the options. If you choose just gummy bears, you'll get what you want, but you'll only get gummy bears. However, if you choose the pack with gummy bears and lollipops, you'll get both things, but pay a little bit more.

So, you end up buying the pack with both gummy bears and lollipops. This is the decoy effect.

The decoy effect happens when a third option is added to a set of options to influence the decision-making of a person. The third option is not intended to be chosen, but rather to make one of the other options more appealing. It tricks a person into choosing a more expensive or previously overlooked option by comparing the options against the decoy.

In our example, the pack with both lollipops and gummy bears was the decoy option. It made the option with only gummy bears less attractive, leading you to choose the one with both.

The decoy effect is used in marketing and sales to influence your choices. It can be helpful to be aware of this effect and how it works, so that you can make more informed decisions.