Skip to content
Psychology

What is The decoy effect?

The decoy effect is when adding a third, less attractive option nudges people toward a specific choice. A cleverly priced 'decoy' makes one of the original options look like a much better deal — a tactic widely used in pricing menus.

See it, don’t just read it.
Watch a 2-minute lesson with voice + animation that explains the decoy effect.
▶ Watch the visual lesson

Key things to understand

  • 1A third 'decoy' option shifts which choice we prefer.
  • 2The decoy makes a target option look like a great deal.
  • 3It exploits how we compare options relative to each other.
  • 4It's common in pricing tiers and menus.

Frequently asked questions

What is the decoy effect?
When adding a deliberately inferior option steers people toward a particular, more profitable choice.
What's a classic decoy effect example?
A pricing tier where a 'large' costs nearly the same as a 'medium', making the large look like a steal.
Why does the decoy effect work?
We judge options by comparison, so a decoy reframes one choice as clearly superior.

Related topics