The Decoy Effect is a powerful marketing strategy rooted in behavioral economics. It occurs when a third, less attractive option (the “decoy”) is introduced to influence consumers toward a target product. This decoy is priced or designed to make another option seem superior in comparison.

For example, consider a popcorn stall: a small popcorn costs ₹100, a large ₹250, and a medium ₹230. Most people originally choose the small one. But when the medium is introduced, the large suddenly seems like a “better deal” for just ₹20 more, even though nothing has changed about the large popcorn’s value.

Marketers use this tactic to steer consumer perception, not through manipulation, but by framing comparisons in a favorable way. The decoy acts as an anchor for rationalizing choices. This effect highlights that people rarely make decisions in isolation; they evaluate options relatively, not absolutely.

From subscription plans to menu pricing, the decoy effect remains one of marketing’s most subtle yet effective persuasion tools, demonstrating that context often drives choice more than logic.