Fooled again! Decoys in pricing.
The Decoy Effect (Asymmetric Dominance Effect) irrationally influences our decision making. Here’s how:
Let’s look at The Economist’s pricing plan.
If you’re not familiar, here’s the gist:
The Economist presented 3 subscription options:
1. Web only ($59)
2. Paper only ($125)
3. Web and paper only ($125)
Option 2 serves as a decoy to influence you to purchase Option 3.
Dan Ariely (author of Predictably Irrational) interviewed 100 MIT Students. The results: 16 students chose Option 1 and 84 students chose Option 3. No one chose Option 2.
If only given Option 1 and 3, the majority of consumers would select Option 1. In fact, Ariely repeated the survey with only these two options. The results: 68% chose Option 1 and 32% chose Option 3.
There is a clear change in preference when Option 2 is present.
This is the truth about relativity. People compare things that are easily comparable.
You commonly see decoys in retail shopping and with expensive restaurant menu items.
These anchor effects are strong. Even if you consciously attempt to think of items in absolute vs. relative terms, you could still be subconsciously swayed.
Inspo: Dan Ariely
>>>Where else do you see decoys?
>>>How do you prevent anchors from influencing your decisions?