Decoy effect

Decoy effect

In marketing, the decoy effect (or asymmetric dominance effect) is 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. An option is asymmetrically dominated when it is inferior in all respects to one option; but, in comparison to the other option, it is inferior in some respects and superior in others. In other words, in terms of specific attributes determining preferability, it is completely dominated by (i.e., inferior to) one option and only partially dominated by the other. When the asymmetrically dominated option is present, a higher percentage of consumers will prefer the dominating option than when the asymmetrically dominated option is absent. The asymmetrically dominated option is therefore a decoy serving to increase preference for the dominating option. The decoy effect is also an example of the violation of the independence of irrelevant alternatives axiom of decision theory.

Example

For example, if there is a consideration set involving MP3 players, consumers will generally see higher storage capacity (number of GB) and lower price as positive attributes; while some consumers may want a player that can store more songs, other consumers will want a player that costs less. In Consideration Set 1, two devices are available:

Consideration Set 1
A B
price $400 $300
storage 30GB 15GB

In this case, some consumers will prefer A for its greater storage capacity, while others will prefer B for its lower price.

Now suppose that a new player, C, is added to the market; it is more expensive than both A and B and has more storage than B but less than A:

Consideration Set 2
A B C
price $400 $300 $450
storage 30GB 15GB 25GB

The addition of C—which consumers would presumably avoid, given that a lower price can be paid for a model with more storage—causes A, the dominating option, to be chosen more often than if only the two choices in Consideration Set 1 existed; C affects consumer preferences by acting as a basis of comparison for A and B. Because A is better than C in both respects, while B is only partially better than C, more consumers will prefer A now than did before. C is therefore a decoy whose sole purpose is to increase sales of A.

Conversely, suppose that instead of C, a player D is introduced that has less storage than both A and B, and that is more expensive than B but not as expensive as A:

Consideration Set 3
A B D
price $400 $300 $350
storage 30GB 15GB 10GB

The result here is similar: consumers will not prefer D, because it is not as good as B in any respect. However, whereas C increased preference for A, D has the opposite effect, increasing preference for B.

References


Wikimedia Foundation. 2010.

Игры ⚽ Нужно решить контрольную?

Look at other dictionaries:

  • Decoy-Effekt — (wörtlich Täusch Effekt) ist ein Begriff im Marketing (auch als asymmetrischer Dominanzeffekt bezeichnet), der das Phänomen einer stärkeren Bevorzugung der Verbraucher gegenüber einem Produkt unter Berücksichtigung zweier bestimmter Produkte… …   Deutsch Wikipedia

  • Decoy — For other uses, see Decoy (disambiguation). Carved, wooden duck decoys A decoy is usually a person, device or event meant as a distraction, to conceal what an individual or a group might be looking for. Decoys have been used for centuries most… …   Wikipedia

  • Sieglinde (decoy) — Sieglinde was a decoy used during the Second World War by German U boats. Similar to the Pillenwerfer noisemaker, except that it was powered by electric motors allowing to move at 6 knots (11 km/h) as well as rise and fall. The effect was that it …   Wikipedia

  • Asymmetrischer Dominanzeffekt — Decoy Effekt (wörtlich Täusch Effekt) ist ein Begriff im Marketing (auch als asymmetrischer Dominanzeffekt bezeichnet), der das Phänomen einer stärkeren Bevorzugung der Verbraucher gegenüber einem Produkt unter Berücksichtigung zweier bestimmter… …   Deutsch Wikipedia

  • Predictably Irrational — Infobox Book name = Predictably Irrational: The Hidden Forces That Shape Our Decisions title orig = translator = image caption = author = Dan Ariely illustrator = cover artist = country = USA language = English series = subject = genre =… …   Wikipedia

  • List of Numb3rs episodes (season 5) — Numb3rs Season 5 DVD box Country of origin United States No. of episo …   Wikipedia

  • Список эпизодов сериала «4исла» — «4исла» (англ. Numb3rs)  детективный телевизионный сериал, созданный Николасом Фалаччи и Шерил Хьютон. Премьера телесериала состоялась 23 января 2005 года, 18 мая 2010 года CBS закрыл сериал …   Википедия

  • List of effects — This is a list of names for observable phenonema that contain the word effect, amplified by reference(s) to their respective fields of study. #*3D audio effect (audio effects)A*Accelerator effect (economics) *Accordion effect (physics) (waves)… …   Wikipedia

  • Anexo:Episodios de Numb3rs — La siguiente es una lista de episodios de la serie norteamericana NUMB3RS. Contenido 1 Estrenos y Lanzamientos en DVD 2 Primera temporada (2005) 3 Segunda temporada (2005 2006) …   Wikipedia Español

  • Charlie Eppes — Charlie Eppes, PhD First appearance Pilot Episode Last appearance Cause and Effect Portrayed by …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”