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Decoy Effect
Definition
The Decoy Effect refers to the effect that when a consumer is making a choice between two options, the choice may change if a third option (a decoy) is added. In other words, it is a strategy to induce a consumer's choice by introducing a worse option or a similar option in price.
Explanation
For example, let's compare the iPhone 5C and the iPhone 5S. The iPhone 5C has lower performance than the iPhone 5S, but the price is similar. In this case, the iPhone 5C acts as a decoy for the iPhone 5S, inducing consumers to choose the iPhone 5S, which has better performance. You can devise a strategy to guide users' choices in the direction you want by utilizing the Decoy Effect.
Importance
This effect plays an important role in marketing strategies and product design. By utilizing the Decoy Effect, you can induce users to choose a more expensive or better product, thereby increasing sales or making them prefer a particular product.
