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 comparasion to the other option, it is inferior
in some respects and superior in others. In other words, in terms of specific
attributes determining preferabillity, 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.
---Diah Murwati---
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Follow Me on Twitter @dityDM
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