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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 trick that makes you overspend

The trick that makes you overspend

https://www.bbc.com/worklife/article/20190801-the-trick-that-makes-you-overspend

bbc.com

6

Key Ideas

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.

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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.

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