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Definition: the Decoy Effect is the phenomenon whereby consumers will tend to have a specific change in preference between two options when also presented with a third option that is asymmetrically dominated. In simple terms, when deciding between two options, an unattractive third (middle) option can change the perceived preference between the other two, typically in favor of the more expensive one. It is one form of psychological pricing. |
More on pricing: By-Product Pricing, Cost-based Pricing, Demarketing, Dynamic Pricing, Loss Leader, more on pricing... You may also like: Full-time MBA, Executive MBA, Executive Education, Online MBA. MBA Brief offers concise, yet precise definitions of concepts, methods and models as taught in a study Master of Business Administration. We like to keep things short, and provide links to learn more about your subject.
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