The decoy changes the comparison, not the deal
Imagine choosing between a basic subscription and a more expensive plan with extra features. A third plan appears: it costs nearly as much as the premium one but offers fewer features. That third option may not be attractive on its own. Its job is to give the premium plan a nearby rival that looks plainly inferior.
This is called the decoy effect. People often judge options by comparing them with what is available, rather than evaluating every price and feature against a fixed standard. The weak plan makes the premium plan’s advantages easier to notice: for a small additional cost, the premium choice seems to deliver much more. The basic plan may still be the cheapest, but now it can feel like a compromise rather than the obvious sensible pick.
Why the setup can influence a choice
The decoy works best when it is worse than the target on relevant features and close enough in price to make the target look like a better trade. It does not make the premium plan objectively cheaper; it changes which comparison comes to mind. With only the basic and premium options, a buyer may focus on the premium plan’s high price. Add the decoy, and the buyer may instead focus on how little extra the premium plan costs compared with what it adds.
That shift can help a seller steer attention toward a preferred option without changing its sticker price. It also offers a useful check for shoppers: if an option seems suddenly irresistible, compare its actual cost and benefits with what you need—not just with the least appealing choice on the menu.
