Special Report on
The Decoy Effect
The Decoy Effect - Trends
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The decoy effect Seth Godin talks about the power of the decoy effect. That's when "there are two wines for sale at dinner: $9 a bottle or $16 a bottle. Which one do you order? Now, imagine that there are three, and the third is $34. Are you more likely to buy the $16 bottle now? Most people are." When marketing products or services, this kind of triangulation is used to drive people toward particular choices. It doesn't just work for consumers. Godin points to a Washington Post article that describes how the decoy effect can sway voters. That article gives some good advice: "Be wary if a difficult ...
Clinton recently suggested that if she wins the Democratic primaries, she would select Obama as her vice president. Was this a good move on her part? How should Obama have reacted to this? The field of behavioral economics has shown a phenomenon called the asymmetric dominance effect (or the decoy effect). The basic idea is that when we are presented with two options that are rather different, we have a hard time making a choice between them. In such cases, if a third alternative that is similar to one option but clearly inferior to it is added to the mix it can change the choices we ... Read More
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