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Decoy effect

Description

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.

Example 1:

A software company offers three subscription tiers: Basic ($10), Pro ($20), and Pro+ ($22, with only slightly more features than Pro). The Pro+ acts as a decoy, making the Pro version appear as better value.

Example 2:

When selling software subscriptions, offering three tiers: Basic ($10), Pro ($20), and Pro+ ($22, with only slightly more features than Pro), makes the Pro version seem like the best value, increasing its sales.

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