Decoy effect

The decoy effect is a preference shift caused by adding an inferior option that is asymmetrically dominated by one of two alternatives, making that alternative more attractive.

Asymmetric dominance: A relation in which one option is worse than another on every relevant attribute, but not worse than a third on every attribute. The decoy is dominated by the target, but does not similarly dominate the competitor.
Pricing strategy: The methods businesses use to set prices in pursuit of commercial goals. A deliberately inferior price-feature package can make a preferred tier seem like better value.
Attraction effect: A preference shift toward an option after adding an asymmetrically dominated alternative. This is the common technical name for the decoy effect.
Asymmetric dominance paradigm: An experimental design that tests choices after introducing an alternative dominated by one existing option but not another. This paradigm isolates the structure used to demonstrate the decoy effect.
Context effect: A change in judgment or choice caused by the presence or presentation of other options. The decoy effect is a specific context effect: adding an option changes preference between existing ones.
Product line pricing: The practice of setting prices across related products or service tiers. A decoy tier can steer customers toward a more profitable option in the same line.
Compromise effect: A tendency to favor an intermediate option when alternatives form an ordered range. It favors the middle option, whereas a decoy effect depends on asymmetric domination.
Joey and Phoebe television choice study: A behavioral experiment using television preferences to examine how an asymmetrically dominated option changes choice. This study helped establish the effect's experimental form.
Similarity heuristic: A decision strategy that uses resemblance to assess how alternatives compare or divide choice share. A decoy often resembles its target, drawing comparisons toward the target rather than its competitor.
Menu engineering: The analysis and design of restaurant menus to influence sales and profitability. Menu prices and item combinations can create comparisons that favor selected dishes.

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