Decoy Effect

The addition of MP3 Player C, which buyers are likely to avoid (they may pay less for a model with more memory), results in MP3 Player A, the dominant option, being chosen more often than when we had only two options. Since A is better than C in both respects, while B is only partially better than C, more consumers will prefer A now than before (quoted from Wikipedia). Since A is better than C in both respects, while B is only partially better than C, more consumers will prefer A now than before. [Sources: 11, 14]

Therefore, C is a bait whose sole purpose is to increase A’s sales. Add decoy C-considering that models with more memory may pay a lower price, consumers may avoid this-do it. Compared with only two options in consideration set 1, which option should be selected more frequently; C affects consumer preferences and serves as the basis for comparing A and B. In other words, the decoy effect is a phenomenon in which the attractiveness of B (relative to A) can be enhanced by adding an additional option D, which is dominated by author B (Li et al., 2019). Marketers refer to the decoy effect as an asymmetric advantage effect, and explore the phenomenon that when consumers have a third option in addition to the two options they have, they can signal a change in preference. The new incentive measures create asymmetric advantages. [Sources: 1, 2, 8, 14]

The decoy effect is technically known as asymmetric dominance and occurs when people’s preference for one option over another changes as a result of the addition of a third option (similar but less attractive). Bait effect is defined as a phenomenon in which consumers change their preferences between two options when they are presented with a third option – “bait”, with “asymmetric dominance”. In marketing, the decoy effect (or gravity or asymmetric dominance effect) is a phenomenon in which consumers will tend to have a certain preference change between two options when a third option with asymmetric dominance is also presented. [Sources: 1, 4, 6]

The decoy effect, or asymmetric dominance effect, is a cognitive bias in which consumers will tend to have a certain change in preference between two options when a third option with asymmetric dominance is also presented. The decoy effect is the phenomenon in which the addition of a third pricing option causes the consumer to change their preference in favor of the option the seller is trying to promote. But when consumers are presented with a different strategic bait option, they are more likely to choose the more expensive of the two initial options. [Sources: 5, 12, 14]

The bait effect can also be measured by how much more the consumer is willing to pay to select a target rather than a competitor. Advertisers and marketers use fictitious prices to make the targeted option appear higher than similar low-priced products. Companies are pushing customers, who usually buy the cheapest product, towards the more expensive product. [Sources: 0, 1, 11]

Marketers use a particularly cunning pricing strategy to switch your choice from one option to a more expensive or profitable option. It seems that the only thing that really makes sense is the “best price” offer. Price is the most subtle factor in the marketing mix. We have considered a lot about setting prices so that we can spend more money. Based on the theory that consumers tend to choose products or services of average value and price, marketers use the trade-off effect to increase the desire to buy average value products from customers. [Sources: 0, 5, 7]

Consumers may prefer a higher quality product more than a cheaper product of lower quality when offered a third option, which is relatively inferior to the first product in terms of quality, price, or both. [Sources: 15]

Decoy manipulates the decision-making process by directing consumers’ attention to the target option. Bait is not meant to be sold, but only to drive consumers away from the “competitor” and toward the “target,” usually the most expensive or profitable option. When used as a marketing strategy, the price of the bait not only increases profits, but also improves the overall image of the targeted product or service. [Sources: 0, 4]

Adding bait increases the likelihood of buying a higher quality product. The bait should be chosen so that it resembles the target variation, but is slightly smaller in order to create an effect. Once added, bait changes your choice from competitor to target. [Sources: 9, 10]

This makes you less likely to rate a competitor than the other two options and are more likely to rate a target than a decoy. And if you are evaluating a target by bait, the only differentiating factor is price, which means that you will be the one to choose the target. In this situation, it can be foreseen that if (for example) the memory size of the bait is too close to the memory of the target, the two products may appear to be nearly identical, and the bait is unlikely to affect the inversion of choice. While it is difficult to imagine how this confounder encourages people to choose a target option over other options, decoy research is ideal if it can rule out this confounder. [Sources: 2, 9, 10]

Note that since it is well known that strong prior preferences of both target and competitor can inhibit the effect of bait injection (Huber et al., 2014), our study clearly focuses on scenarios in which options can be created. [Sources: 10]

We base our decisions on what is more profitable than what is best for our purpose, when the decoy option is right between our choice and what marketers want to sell. Calls usually hit us unnoticed; whatever we end up choosing, we believe we are doing it independently. By manipulating these key attributes of choice, bait guides you in a certain direction, giving you the feeling that you are making rational and informed choices. [Sources: 0, 4, 13]

Thus, the decoy effect is a form of “nudge” that Richard Thaler and Cass Sunstein defined (pioneers of nudge theory) as “any aspect of choice architecture that alters people’s behavior in a predictable way without inhibiting any options.” Not all attacks are manipulative, and some argue that even manipulative attacks can be justified if the goal is noble. This has been demonstrated in many areas such as medical decisions (Schwartz and Chapman, 1999), consumer choice, gambling preferences, and so on (Huber et al., 1982; Heath and Chatterjee, 1995). This is consistent with the claim that the bait effect is persistent (Huber and Mccann, 1982). [Sources: 2, 3, 4]

In this study, the state of the bait had a higher visual load than the control state. In any case, with the exception of lottery tickets, the decoy successfully increased the likelihood that the target was chosen. As expected, when bait opportunity was present, people were more likely to target. The addition of bait allowed people to judge the beer by quality and forget about the price. [Sources: 2, 4, 9, 13]


— Slimane Zouggari


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