Increase your sales with the Decoy Effect: A Strategic Gamechanger

Bhargav Kumar Gokavarapu (Goku)
2 min readNov 22, 2023

The world of marketing is filled with psychological tactics and strategies, one of which is the decoy effect. This phenomenon, also known as the asymmetric dominance effect, is a powerful tool that marketers use to influence consumer behavior and drive sales.

Understanding the Effect

The decoy effect is a phenomenon where consumers change their preference between two options when presented with a third option — the “decoy” — that is “asymmetrically dominated”. This means the decoy is priced or presented in such a way that it makes one of the other options much more attractive. The decoy is not intended to sell, but to nudge consumers away from the “competitor” and towards the “target” — usually the more expensive or profitable option.

The Decoy Effect in Action

Let’s consider a scenario to better understand the decoy effect. Imagine you’re at a theatre watching Shah ruk’s film, looking for a popcorn. You decide on a Caramel and Cheese mix, but you’re torn between the small and large sizes. The small size seems sufficient, but the large size is only $7 more.

Now, let’s add a third option into the mix: a medium size. While there’s a $4 difference between the small and large sizes, there’s only a $2…

--

--