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What is the Decoy Effect?

 , 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.
Overview: Decoy Effect
TypeCognitive Bias
DefinitionThe tendency for the presence of bad choices in a list of options to direct behavior.
ExamplePrice List
2 for $4
4 for $16
10 for $20
Related ConceptsPricing Strategy

Cognitive Biases

This is the complete list of articles we have written about cognitive biases.
Ambiguity Effect
Anchoring
Backfire Effect
Base Rate
Biased
Biases
Circular Reasoning
Cognitive Bias
Cognitive Dissonance
Complexity Bias
Crab Mentality
Creeping Normality
Curse Of Knowledge
Decoy Effect
Ethnocentrism
False Analogy
False Hope
Fear Of Youth
Golden Hammer
Halo Effect
Hindsight Bias
Negativity Bias
Optimism Bias
Peak-End Rule
Positive Bias
Sour Grapes
Survivorship Bias
Us vs Them
Victim Mentality
Wishful Thinking
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Cognitive Biases

A list of common cognitive biases explained.

Curse Of Knowledge

Why experts have trouble communicating.

Optimism Bias

An overview of optimism bias, including its surprising benefits.

Biases vs Heuristics

The difference between biases and heuristics.

Information Cascade

A definition of information cascade with examples.

Functional Fixedness

A definition of functional fixedness with examples.

Boil The Frog

A definition of boil the frog, with examples.

Anecdotal Evidence

The definition of anecdotal evidence with examples.

Scientism

The definition of scientism with examples.

Thought Processes

A list of thinking approaches and types.

Logic

A few logic terms explained.

Abstract Ideas

A few dangers of being too abstract.

Objective vs Subjective

The difference between objective and subjective.

Intellectual Diversity

A definition of intellectual diversity with examples.

Creative Value

The definition of creative value with examples.

Benefit Of Doubt

The definition of benefit of doubt with examples.

Pessimism

The definition of pessimism with examples.
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