The Power of the Decoy Effect: Why We Make Irrational Choices
Have you ever noticed how much easier it feels to make a decision when one option is clearly worse than another? This simple quirk of human psychology is known as the decoy effect—and it has a surprisingly big influence on the way we shop, choose, and even fall in love.
At its core, the decoy effect works like this: when we are faced with two options that are difficult to compare, we feel stuck. But if a third option—a “decoy”—is introduced, one that is similar but clearly inferior to one of the original choices, it suddenly makes the superior option look much better overall.
Take house hunting as an example. Imagine you are deciding between three homes: one contemporary style, and two colonials. The contemporary stands on its own, but the two colonials are directly comparable—except that one needs a new roof. The colonial with the good roof automatically looks like the best choice, not just compared to its flawed twin, but compared to the contemporary as well. The decoy (the colonial needing repairs) pushes you toward the colonial in good condition.
This effect pops up everywhere:
Travel decisions: Choosing between Paris and Rome might be tough—until the travel agent offers “Rome without free breakfast.” Suddenly, Rome with breakfast seems like the clear winner.
Marketing tricks: When Williams-Sonoma struggled to sell their $275 bread-making machine, they introduced a larger, pricier version. Few bought the bigger machine, but sales of the cheaper one skyrocketed. The expensive decoy made the smaller version look like a bargain.
Dating dynamics: Believe it or not, research shows that a slightly less attractive “decoy” person standing next to you can make you look more appealing to others.
What’s fascinating is that these decisions feel rational in the moment, but they are actually being steered by subtle comparisons. The decoy effect reminds us that our choices are rarely made in isolation—they are shaped by the context in which options are presented.
Of course, relativity can also cause us pain. Constantly comparing ourselves to others—our salaries, homes, or lifestyles—feeds envy and dissatisfaction. This is why, as Dan Ariely points out, the ancient commandment “Do not covet your neighbor’s house” may be one of the hardest to follow.
The next time you’re making a decision—whether buying a gadget, planning a trip, or choosing between career options—pause and ask yourself: Is there a decoy influencing me? Recognizing it just might help you make a choice that truly reflects your values, not just a clever comparison.
Reference:
Ariely, D. (2009). Predictably Irrational: The Hidden Forces That Shape Our Decisions (Revised and Expanded Edition).HarperCollins.
