Decoy Effect Simulator
Design a 'Third Option' (Decoy) to steer customers toward your target product. Leverage asymmetric dominance to boost upsells.
Configure Options
Option A (Low / Budget)
Option B (Target / Winner)
Option C (The Decoy)
Should be close to Target price but clearly worse value.
Small
Medium
"Why buy this when for just $0.50 more..."
Large
"...I can get THIS!"
The Nudge in Action
How the decoy shifts value perception.
Comparison A vs B
Without the decoy, the customer compares $3 vs $7. That's a big jump (more than double). Many choose Small.
Enter the Decoy ($6.50)
Now the customer compares Medium ($6.50) vs Large ($7). For only $0.50 more, they get the Large. It feels like a 'no-brainer'.
Result
The comparison shifts from 'Small vs Large' (Price pain) to 'Medium vs Large' (Value gain). The Target wins.
Execution Steps
Define your 'Low' option (Budget choice).
Define your 'High' option (Target choice - the one you want to sell).
Set the 'Decoy' option. It should be close in price to the High option, but clearly inferior in value.
Observe how the Decoy makes the High option look like the 'rational' winner.
Pro Strategy
- The Decoy should be priced very close to the Target (e.g., $6.50 vs $7.00) but offer significantly less value.
- Don't hide the decoy. It needs to be visible to serve its purpose as a comparison point.
- Common in SaaS (Basic, Pro, Enterprise) where Pro is the target and Basic is too limited, or Enterprise is too expensive.
Core Concepts
Asymmetric Dominance
The phenomenon where a consumer's preference for one option over another changes when a third option (the decoy) is presented that is 'dominated' by one option but not the other.
The Target
The option you actually want the customer to buy (usually the highest margin item). The decoy exists solely to make this target look better.
Choice Architecture
Designing the environment in which people make choices to influence their decision making.
What is Decoy Effect Simulator?
The Decoy Effect (or Attraction Effect) demonstrates that we do not evaluate options in isolation. We evaluate them comparatively. By introducing a third option that is objectively worse than the Target but comparable to the Competitor, we shift preference toward the Target.
Best For
- • Creating SaaS pricing tiers (Good, Better, Best).
- • Menu design (Small, Medium, Large).
- • Bundling products to clear inventory.
Limitations
- • Requires the customer to compare features (high engagement).
- • Can backfire if the decoy is too attractive.
- • Doesn't work if customers are strictly budget-constrained.
Alternative Methods
Anchor Pricing
Using a high reference price without a specific third product option.
Goldilocks Pricing
Positioning the middle option as 'Just Right' between two extremes.
Industry Applications
See how this methodology generates real revenue uplift in different sectors.
The Economist Subscription
Users were buying the cheap 'Web Only' sub ($59). 'Print+Web' ($125) was selling poorly.
Added a decoy: 'Print Only' for $125 (Same price as the bundle!).
Movie Theater Popcorn
Maximize revenue per customer.
Small: $3. Large: $7. Added Medium at $6.50.