The Decoy Effect: How You Are Influenced to Choose Without Really Knowing It

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« on: February 18, 2020, 11:27:49 pm »
The Decoy Effect: How You Are Influenced to Choose Without Really Knowing It

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How Decoys Work

When consumers are faced with many alternatives, they often experience choice overload – what psychologist Barry Schwartz has termed the tyranny or paradox of choice. Multiple behavioural experiments have consistently demonstrated that greater choice complexity increases anxiety and hinders decision-making.

In an attempt to reduce this anxiety, consumers tend to simplify the process by selecting only a couple of criteria (say price and quantity) to determine the best value for money.

Through manipulating these key choice attributes, a decoy steers you in a particular direction while giving you the feeling you are making a rational, informed choice.

The decoy effect is thus a form of “nudging” – defined by Richard Thaler and Cass Sunstein (the pioneers of nudge theory) as “any aspect of the choice architecture that alters people’s behaviour in a predictable way without forbidding any options”. Not all nudging is manipulative, and some argue that even manipulative nudging can be justified if the ends are noble. It has proven useful in social marketing to encourage people to make good decisions such as using less energy, eating healthier or becoming organ donors.