OnDemand WTP Pricing Research

The trick that makes you overspend | BBC Worklife

When you buy a cup of coffee, you might have noticed that of the three size options – small, medium and large – the medium-sized serving often costs almost as much as the large. Given the apparent bargain, have you ever opted for the biggest and most expensive option?

If so, you have been nudged by a cognitive bias known as the “decoy effect”, in which the deliberate presentation of an additional, slightly less attractive option – in this case, the relatively expensive medium-sized coffee – pushes you to pay out more money than you would have rationally chosen. “If you frame options in a certain way, you can nudge people in the direction of higher-priced products,” says Linda Chang, a psychologist at Harvard University.

The decoy effect was first investigated as a potential marketing strategy to influence consumer choices such as this, but the latest research shows that it could also have potent effects in recruitment, healthcare, even politics. It shows us just how easily our judgement is swayed by the context in which the facts are presented – even when that additional information may have no bearing on the overall judgement.

By learning about the decoy effect, you may become less susceptible to this unconscious influence. You may even discover ways to put it to your own use as a tool for persuasion.

Read complete article here:

The trick that makes you overspend – BBC Worklife.

Post a Comment

WP-SpamFree by Pole Position Marketing