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The trick that makes you overspend
Fine-tune your judgement
Whether you are choosing a pair of sneakers or deciding on an insurance plan, it is always better to keep a watchful eye on the options provided.
Learn to fine-tune your judgement to not be distracted by false targets, and misleading options.
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The Decoy Effect
It is a marketing tactic used to nudge you into purchasing a higher-priced variant of a product or service.
The Decoy effect can be applied in recruitment, polls, elections, or anywhere else where there is a choice involved.
The extra-large glass
A well-designed decoy can shift our decision making between two options as much as 40%.
For example, we are more likely to buy the large glass of juice at the counter when we have been provided with a choice in which the smaller glass is priced only slightly less. We tend to opt for the bigger glass (even if we don't need more juice) as it looks like a bargain.
The Unattractive Option
- The Unattractive Third Option (The Decoy) has no real value in itself and is just placed to sway the decision maker towards the higher-priced option.
- The Decoy's only purpose is to make the expensive option appear like a bargain.
- This has also been widely used in subscription options of magazines and in the high-end diamond market.
Emotions in the Decoy effect
Higher levels of testosterone, leading to impulsive behavior, leads to more susceptibility to the Decoy Effect.
Intuitive thinkers tend to fall more for it, along with people that join in group decision making.
Dating and Voting
The Decoy Effect can influence our dating choices, as the person who may not be attractive, can appear handsome to us in the presence of a slightly less attractive friend, as our mind will subconsciously compare the two.
Choosing candidates during elections, or during an interview process can also be influenced by the decoy effect.
Fine-tune your judgement
Whether you are choosing a pair of sneakers or deciding on an insurance plan, it is always better to keep a watchful eye on the options provided.
Learn to fine-tune your judgement to not be distracted by false targets, and misleading options.
SIMILAR ARTICLES & IDEAS:
2
Key Ideas
Breadcrumbed At Work
Breadcrumbing is a corporate practice in which the employee is provided the bare minimum or less than optimal information, feedback, rewards by the manager, keeping it a one-way communication.
...The Opposite Of Empowered
- The employee cannot invest in a career if there is no visible sign of a career in the first place. The employee feels disposable and undervalued in the organization, with the manager ghosting him at times.
- Important information is thrust upon the employee, rather than taking his opinion first.
- There is no interest of the employer in employee development or empowerment.
3
Key Ideas
The decoy effect
It happens when consumers change their preference between two options when presented with a third option, or decoy.
The decoy is priced to make one of the other options much more attra...
How decoys work
When consumers are faced with many alternatives, they often experience choice overload that increases anxiety and hinders decision-making.
Consumers try to reduce this anxiety by selecting only a couple of criteria (say price and quantity) to determine the best value for money.
A decoy steers you in a particular direction while giving you the impression that you are making a rational, informed choice.
Decoy example in the market
Consider the price of drinks at a well-known juice bar: a small (350 ml) size costs $6.10; the medium (450 ml) $7.10; and the large (610 ml) $7.50. The medium is a slightly better value than the small, and the large better still. The medium is designed to be the decoy, steering you to see the biggest drink as the best value for money.
If you buy the biggest, was it because you made a sensible choice, or have you been manipulated to opt for bigger than intended?
15
Key Ideas
Save On Transport Without a Car
You’ll save far more if you don’t buy a car or sell it if you already own one but can go without it.
If you can use public transportation, you can save quite a bit of money on ...
Save On Transport While Keeping a Car
Carpool to work if you can to significantly reduce wear and tear on your car, save on gas, and take advantage of carpool lanes that might make it easier to get to work.
Check at least once a month to keep the tires on your vehicle properly inflated. Doing so can improve your gas mileage.
Save On Debts
Refinance your home or automobile at a lower rate to save money over the life of the loan and lower your monthly payment.
If your student loans are locked in at a high-interest rate, figure out whether it makes sense to consolidate all or some of them.
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