Predictably Irrational

Predictably irrational: The influence of "decoy" on buyer behaviour.

In this essay I set out to describe the influence of "decoy" on buyer behaviour. I try to explain what "decoy" is.

First, i want the reader to consider an experiment. Below is an advertising from web site of a magazine, the Economist.

|SUBSCRIPTIONS | |

|Economist | |

|Web subscription |US $ 59.00 |

|Print subscription |US $ 125.00 |

|Print & web subscription |US $ 125.00 |

In the case of the Economist, you may not have known whether the Internet-only subscription at $59.00 is a better deal than the print-only option at $125. But you certainly knew that the print-and-Internet option for $125 is better than the print-only option at $ 125. In fact, you could deduce that in the combination package,the Internet subscription is free! So, I think most people would choose the third one. Compared with others the third one looks like very tempting. Among participants who have been tested, the majority preferred the Internet-and-print deal.

So what was going on here? Let us start with a basic observation: most people do not know what they want, unless they see it in context. We don't know what kind of brand's clothes we want, until we see a movie star in some ceremony wearing some brand's clothes. We don't know what kind of speaker system we like-until we hear a set of speakers that sounds better than the previous one. What force influenced customer's decisions?

In the case of the Economist,...