Expert team, exceptional design, exponential growth.

journal

Decoy Option Effect

Influences preferences by introducing a less attractive intermediate option, subtly steering choices towards more profitable alternatives.

Decoy Option Effect

Neha was on her lunch break at a local café, debating between two sandwiches on the menu. One was a hearty chicken and avocado wrap priced at ₹250, and the other, a smaller veggie sandwich, was ₹150. Neha wasn’t in the mood for too much food, but the chicken wrap was tempting. However, she was hesitant about spending more than she intended.

As she glanced at the menu, something caught her eye. There, right next to the chicken wrap, was a new sandwich – a premium chicken and avocado wrap priced at ₹350. Neha’s first thought was that ₹350 was far too expensive but her experience with pricing made her reconsider. Her eyes returned to the original chicken wrap at ₹250, which suddenly seemed like a much better deal in comparison to the ₹350 option, even though it was the same sandwich with a slight difference in quality or presentation.

Without much thought, Neha opted for the ₹250 chicken wrap, feeling like she got a good deal. The barista rang her up, and as she waited for her order, Neha realized that she hadn’t really compared the two chicken options, just the price difference between the original wrap and the new expensive one.

What Neha didn’t realize was that the introduction of the ₹350 premium wrap had nudged her to choose the more expensive chicken wrap. The cheaper veggie sandwich was now out of the picture, and she didn’t even notice that the café had used a “decoy” – an option designed to make the middle-tier product seem more appealing.

The decoy effect happens when the introduction of a less attractive option influences us to choose the one that seems like a better deal, even when it may not actually be the best choice.

Next Read

Scarcity Bias

Tendency to value limited or scarce resources more highly than those that are abundantly available.

Small Win Bias – Gratification Bias

Tendency to prioritizes or value short-term rewards over long-term benefits.

The Cheating Bias

Dishonest behavior by getting influenced to do so when observing others, leading to unethical practices.

Sisyphus Effect

Tendency to give up when there is no gratification or visible meaning / output to efforts.

The IKEA Effect

People tend to value an object more if they contribute to its creation.

Dunning Kruger Effect

Overestimating one’s knowledge due to a lack of understanding about the complexity of a subject.

Confirmation Bias

The tendency to search for, interpret, favor and recall information in a way that confirms or supports one’s prior beliefs or values.

Spotlight Effect

The tendency to believe that we are being noticed more than we really are.

Anchoring Bias

People rely heavily on the first piece of information (the “anchor”), even if it’s irrelevant.

Current Mood Bias

It is a distortion in cognition and decision making due to the present emotional state.

Prestige Bias

The tendency to favor the opinions of individuals or groups with higher social status or authority even when not in the same field.

Social Desirability Bias

Tendency to respond to or behave in a way that is socially acceptable or desirable, rather than expressing their true opinions or behaviors.

Recency Bias

The tendency to better recall recent information and events while ignoring older information.

Restraint Bias

The tendency to overestimate the level of control we have over our impulsive behaviors.

Survivorship Bias

The tendency to focus on the individuals or things that have “survived” or succeeded, while overlooking data from those that have not.

Response Bias

Tendency to provide inaccurate or false answers during surveys or interviews.

First impression Bias

The tendency to form lasting opinions based on initial experiences.

Omission Bias

Tendency to avoid taking action due to fear or uncertainty, even when not taking action could be more harmful.

Bundling Bias

The tendency of buying things that are sold together, even if we don’t need everything in the bundle. Think of this as the “package deal effect.”

Distinction Bias

In decision making, we tend to overvalue the minor differences between two almost similar options when we examine them together.

Projection Bias

Individuals overestimate the prevalence of their own thoughts, beliefs, preferences, and knowledge in others.

Salience Bias

Our tendency to focus on items or information that are more noteworthy while ignoring those that do not grab our attention.

Diversification Bias

Spreading our resources thinly across numerous options instead of concentrating on a few.

Pessimism Bias

A tendency to believe things will go wrong even when there is no evidence to support it.

Optimism Bias

Tendency to overestimate the likelihood of positive outcomes and underestimate the negative ones.

Bandwagon Effect

It refers to our habit of adopting certain behaviors or beliefs because many other people do the same.

Framing Bias

Equivalent information can be more or less attractive depending on how it is presented, influencing our decisions.

Recall Bias

Individuals do not accurately remember past events or experiences or leave out details while reporting about them.

Group Think Bias

A group of individuals reaches a consensus without critical reasoning or evaluation of the consequences or alternatives, simply doing or agreeing because everyone else is.