Popcorn, Pricing, and the Decoy Effect
How strategically selected choices can dramatically change consumer decisions. The key is comparison.
While we may not realize it, much of our decision-making process is based on comparison. It’s a central tenant of how we determine the value of all things, especially products and services. The decoy effect is a cognitive bias that plays on this idea of comparison. More specifically, it explores how we compare specific dimensions to make decisions.
Examples of such dimensions include but are not limited to price, size, speed, aesthetic, novelty, etc. While using comparison as a way to determine value is nothing new, the decoy effect takes it a step further.
We can look to the most relatable example of the decoy effect to illustrate this: popcorn pricing at the movie theater. The question is, why do we always end up buying a large bucket of popcorn? Let’s break it down. In the case of popcorn, there are two dimensions we are comparing: size and price.
Small, medium, and large make sense, but when we use those to assess the prices, the obvious choice is to go with large…
