How the Decoy Effect Makes Dupes of Us All


Imagine that, on the second morning of a business trip, you go to unzip your suitcase, only to realize you forgot to pack any pants. With just a few hours before a big presentation, you duck into the closest mall, for a shopping trip with a firm deadline.

You step into a promising store, and with the help of a sales clerk, you quickly narrow the pool of potential pants to just two options.

Pair A is stylish and flattering, but they’re pushing your emergency pants replacement budget at $70.

Pair B won’t turn any heads, but they fit fine, and they’re on sale for $20.

‘Is it worth it to splurge on a pair of pants I’ll only need to wear once?’ you ask yourself, frowning in the dressing room mirror. ‘The cheaper ones will get the job done, and it’s not like I don’t have nice pants at home.’

Just then, the clerk knocks on the door. “Hey,” she says, “As long as you’re trying on slacks, we just got a new shipment in, and I think we’ve got your size.” She passes you a new pair of pants over the door, and you try them on. They’re not as show-stopping as that $70 pair, but they do complement your shirt better than the $20 pants.

Then you check the price tag: $100.

Suddenly, dropping $70 for a high-quality pair of pants doesn’t seem like that big of a deal. They’re the nicest option, and not even the priciest. You quickly come to a decision.

Walking out the door five minutes later, you are $70 lighter, but you have a great new pair of pants, and that inner glow of a savvy shopper.

Congratulations: you just got played.

Psychologists call it the decoy effect. When trying to choose between options (Pair A or Pair B) by weighing several variables (in this case, price and pants quality), your perceptions can be thrown off by introducing an extra option that is inferior in all ways to one candidate, while still preferable in some ways to the other one. (There’s a term for this kind of asymmetric dominance of traits. Actually, the term is “asymmetric dominance.”)

To tilt you towards the more expensive, higher-quality pair of pants, Option C needs to be more costly than Option A, while also not quite as nice.

Conversely, a sales clerk determined to save you money (perhaps someone not on commission) might bias you towards the affordable if middle-of-the-road Option B pants by suggesting you try on a pair of $30 trousers made with cheap fabric and sloppy stitching. Now Option B, with its $20 price tag, looks like a steal.

At the end of the day, the human brain is bad at weighing multiple factors at once, and easily swayed by any available reference points—and companies know this. This isn’t a conspiracy theory; Duke University’s Joel Huber first published an experiment demonstrating the influence of those asymmetrically dominating decoys in 1982. These days, marketers actively discuss the Decoy Effect as a strategy to influence customers towards the “right” decisions.

In his book Predictably Irrational, Dan Ariely refers to this phenomenon as the “secret agent” of many decisions. It’s hard to guard against, because on some level, it looks like smart comparison shopping. Your sales clerk might not have even consciously noticed the subtle manipulations at play—after all, her job is to show you all the pants. A kind clerk might even be relieved to see that you didn’t go with that costly, inferior pair.

Still, there’s something creepy about never knowing which of your consumer decisions might be shaped in part by marketing executives in a boardroom somewhere. Perhaps the best way to get around this—assuming you’ve got the time—is to comparison shop not just between items but between stores. After all, companies have no incentive to compete against themselves, but they do want to offer better deals than their nemeses.

So the next time you need to make a purchase, don’t just consider your options carefully; consider them wisely. Maybe you can even make a game out of trying to spot the decoys…

Check out Robb’s new book and more 

Comments

Post a Comment

Popular posts from this blog

The Robert Frost Quandary, or How Irrational Thinking Might Save Your Life

Image
You stumble out of the wilderness, having had no contact with humans for at least ten days. You’re weak from hunger and fatigue and you find yourself at a crossroads, power lines stretching out along each of the separate roadways. It’s decision time. You think about Robert Frost’s poem, and wonder if his advice to take the road less traveled might not just lead to your demise. What do you do, or more importantly, which brain system should you use to make this crucial decision? Daniel Kahneman, famed psychologist, winner of the Nobel prize for prospect theory and author of Thinking Fast and Thinking Slow might be the one guy to call, assuming your existential crossroads gets cellphone reception. Kahneman explains that we have two systems for making decisions. He refers to them simply as System 1 and System 2. System 1 is reflexive, automatic, and impulsive. It takes a constant reading of your surroundings and generates short-term predictions, all operating on a level beneath yo
Read more

Who Are You: Does Personality Change as We Age?

Image
Are you the same “you” that you were twenty years ago? Thirty? Forty? What about fifty years ago? While science still struggles to quantify, measure, and categorize personality, some have a different question: how stable is personality in the first place? Do the high school version of yourself and the retiree version of yourself still have some common immutable core? It depends how you look at it , says a paper by lead author Rodica Damian of University of Houston and her co-authors Marion Spengler of the University of Tuebingen in Germany, Brent W. Roberts of the University of Illinois at Urbana-Champaign, and UH grad student Andreea Sutu. The paper in question goes by the catchy title “Sixteen going on sixty-six: A longitudinal study of personality stability and change across 50 years.” Damian and her colleagues compared the results for 1,795 U.S. adults who had taken a personality test as teenagers and then again, five decades years later. The team found that yes, there is a
Read more

The Best Painkiller Isn't What You Think It Is

Image
When we say that listening to the right song makes us feel better, usually we mean it in terms of emotions. However, a new study from the University of Utah Health suggests that combining certain painkillers with certain music boosts the pain-fighting effect of the medication a measurable amount. This recent bit of research was conducted specifically on models recreating two types of pain: inflammatory and post-surgical. (Nerve pain, or neuropathic pain, was not addressed.) Low doses of four medications were explored: ibuprofen, cannabidiol, levetiracetam, and NAX 5055. As for music, the researchers went with one artist only, while the control groups were given one of the four drugs and subjected to white noise. What music would you choose for optimal painkilling effect? The experimenters went with Mozart. (Interestingly, the phrase “Mozart therapy” already exists, referring to the beneficial effect ol’ Amadeus can have on patients with epilepsy. For instance, a 2018 st
Read more