Decoy effect: UX psychology

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Imagine browsing your favorite online meal delivery service, torn between two delicious iced coffees. Suddenly, a third, less appealing option appears. You might think it’s just a random addition, but it’s a clever pricing tactic known as the ‘Decoy Effect.’ 

This ingenious strategy manipulates our minds and can persuade us to choose the more expensive option because the other one no longer seems worthwhile, even if we had not planned to!

At Octet, we form designs that are interesting to work with and interact with in addition to being visually appealing. Using this lens, we look at the decoy effect to draw attention to and strengthen your brand’s value propositions.

What is the decoy effect?

In a study published in 1981, scholars Joel Huber, John Payne, and Christopher Puto provided the first explanation of the Decoy Effect.

Decoy effect definition

The “Decoy Effect” phenomenon describes how adding a third pricing choice causes customers to shift their preference in favor of an option the seller is attempting to market. The expense of the “decoy” makes one of the other solutions far more appealing.

Another name for the decoy effect is the ‘asymmetric dominance effect.’ This often happens when you purchase a cappuccino at Starbucks or popcorn at the movies. Unless you had a specific reason for choosing the Small size, such as your coffee being less milky, you would instinctively choose the more significant option due to the slight price difference between the Medium and Large sizes. 

When applying this asymmetric dominance, there are two essential components:

1. You should include an inferior option to make an alternate option appear more enticing.

2. Never undervalue the power of the customer! Each of the three options ought to have a distinct function and worth.

The Decoy Effect, closely tied to Hick’s law, which states that a user becomes confused when presented with too many options, expedites and simplifies the irksome decision-making process. In situations like this, the Decoy effect is powerful because most busy users find it ideal to have a no-brainer option.

Role of decoy effect in UX design

User interface (UI) and user experience (UX) are vital to any product or service’s success in the rapidly evolving world of digital technology. Businesses invest much money in slick, engaging, user-friendly user interfaces to attract clients and boost conversions.

Decoy effect pricing is one powerful tactic that has attracted much interest lately. When integrated into a UI UX design process, this pricing method significantly influences user behavior and decision-making, boosting sales and customer satisfaction. 

Asymmetric dominance could potentially affect design in:

Simplified decision making

Too many options are a prevalent difficulty in his UI UX design, which can lead to decision paralysis. The attraction effect facilitates decision-making by leading users to favored options, lowering cognitive burden, and making decisions easier.

Improve the conversion rate

Decoy pricing can significantly improve conversion rates. Users are more likely to convert if directed to more profitable possibilities. As a result, we observe an increase in conversion rate, a promising outcome for any business.

Decoy effect examples

How do magazines employ the decoy effect?

The decoy effect encourages membership subscriptions by the Economist, the New York Times, and several other magazines. The Economist offered three types of subscriptions.

The first (Web) offer seemed reasonable at $59. The second option (just print) is a bit pricey, but the third alternative (both Web and Print for the same price as a print-only subscription) seems fantastic. To entice subscribers, The Economist offered all three subscriptions at the same price.

How does Apple use the decoy effect?

Apple has mastered the decoy effect, which directs customer purchases. When Apple introduced the updated iPod, the cost was as follows:

16 GB for $229.

32 GB for $299.

64GB costs $399.

In other words, for an extra $70, you get double the storage capacity and more features like a 5MP iSight camera and iPod Touch Loop. However, if you choose double the size (32GB to 64GB), you will pay an extra $100 but will not receive any new features. 

As a result, the 32GB version represents the best value for money. Few would purchase the 16GB edition, and even fewer would choose the 64GB version. However, the 16GB and 64GB models are only decoys designed to make the 32GB version appear more tempting and the best alternative. 

Apple also used this effect for its more expensive items, such as the MacBook Pro.

Best practices for implementing decoy effect

Persuasion can be a robust technique for favorably influencing user decisions, but it must also be utilized responsibly and honestly. So, we recommend these best practices for implementing decoy pricing into your UI UX design process.

Understanding user behavior

Conduct in-depth user research to learn your target audience’s preferences, pain areas, and motivations better because it will assist you in designing locking choices that are tailored to your preferences and encourage you to select the ones you desire.

Keep things simple

Refrain from overloading users with too many options. Limit the number of options and make them clear and concise.

Transparent pricing

Be open about our pricing structure and the value that each option provides. Users should feel like they are making an informed selection rather than being duped into making a specific option.

Test and iterate

Always try several deceptive pricing methods to see which works best for your goods or services. Based on user input and data analytics, iterate and continuously improve the pricing display.

With that stated, here’s how to construct an asymmetric dominance:

You must have three or more competing bids.

Choose a favorite from those (the high-end offer).

Make one of those offers completely substandard (the irrelevant product).

Then, make one of your items superior to the worst (the Decoy).

Create a decoy offer that is inferior to your favorite and priced similarly.

You may also price the decoy higher than your primary offer, but please distinguish asymmetry from absurdity!

Octet advice!

While the decoy effect can be an effective tool in UX design, it has drawbacks. When utilized poorly or excessively, it can make people feel deceived, reducing trust between a brand and its customers. 

This can lead to ethical concerns about transparency and honesty in pricing strategies. It’s essential to use the decoy effect responsibly and ensure that users feel like they are making an informed selection rather than being duped into choosing a specific option.

If people see the decoy method as a deceptive marketing tactic, they may become wary of the brand, potentially resulting in fewer engagement and conversions. That is why it is critical to approach this strategy with caution and integrity.

Ask yourself, “Why am I employing this tactic? Are they to assist the consumer in making the best decision for themselves?.” 

These and other related questions will help guide you.

Furthermore, the decoy effect should never be utilized to hide poor product quality or service. If a product or service fails to deliver on its promises, no amount of psychological manipulation will save the user experience. 

In the long run, quality and honesty are always prioritized.

Frequently asked questions

What is the decoy effect in decision-making?

The decoy effect in decision-making refers to a phenomenon where introducing an additional option that is inferior to one of the existing choices can influence decision-making. This inferior option, known as the decoy, is strategically added to make one of the original options more attractive by comparison. 

This can lead individuals to choose the initially favored option due to the presence of the decoy, even if it may have been their preferred choice with the decoy’s influence. The decoy effect highlights the impact of context and framing on decision-making processes, demonstrating how subtle changes in the available options can significantly influence choices.

What is the decoy effect in UX design? 

The decoy effect is a cognitive bias where consumers tend to change their preference between two options when presented with a third option that is asymmetrically dominated (or seemingly inferior) to one of the original options. 

In UX design, the decoy effect can influence user decision-making by strategically introducing design elements that sway user choices toward a desired outcome or option. By understanding and incorporating the decoy effect into UX design, designers can create interfaces that nudge users towards specific actions or choices for a more user-friendly and effective user experience.

How to use the decoy effect?

To use the decoy effect effectively, you can follow these steps:

1. Identify the options you want to influence the decision-making process.

2. Introduce a third decoy option, which is strategically designed to make one of the options more appealing.

3. Ensure that the decoy option is inferior to one of the original options, making the preferred option stand out.

4. Present the choices to the target audience and observe how the decoy effect impacts their decision-making.

Understanding how to use the decoy effect strategically can help you influence choices and preferences in various scenarios, such as marketing, product design, or decision-making processes.

What is the difference between the decoy effect and the compromise effect?

The decoy effect involves introducing a third option, known as a decoy, to influence decision-making by making one of the other options more attractive. 

On the other hand, the compromise effect refers to the tendency for individuals to choose an option positioned as a middle ground or compromise between two different options, even if it may not be their preferred choice.

In summary, the main difference between the decoy effect and the compromise effect lies in their mechanisms of influencing decision-making processes. The decoy effect introduces a third option to influence choice, while the compromise effect leverages the appeal of a middle-ground option.