The decoy effect is a phenomenon in marketing where the presence of an asymmetrically dominated option can influence consumer preferences between two other options. Specifically, when a third option that is inferior to one option (the target) but competing in some aspects with the other option (the competitor) is introduced, it can increase the likelihood that consumers will choose the target option over the competitor. Essentially, the decoy serves to make the target option appear more attractive in comparison.
For example, in an experiment with subscription options for The Economist, when a print-only option was included alongside a print and web subscription, it led to 84% choosing the combined option. However, when the print-only option was removed, the combined subscription saw only 32% preference. Thus, the print-only option acted as a decoy to enhance the appeal of the desired subscription.
To overcome the decoy effect, consumers should consciously evaluate options based on their individual needs, ignoring irrelevant alternatives and focusing on the attributes that truly matter to their decision.