|Overview: Decoy Effect|
|Definition||The tendency for the presence of bad choices in a list of options to direct behavior.|
|Example||Price List2 for $44 for $1610 for $20|
|Related Concepts||Pricing Strategy|
What is the Decoy Effect?
John Spacey, updated on December 10, 2016
The decoy effect is a well known tendency for the presence of a bad choice in a list of options to influence decisions. For example, marketers may design a price list to include options that are obviously a bad deal. This often results in a higher conversion rate as customers see the bad deal and choose the better deal thus generating higher confidence to make the purchase.
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