Decoy Effect On Consumer Decision Making

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There are an innumerable number of factors that influence the consumer decision process and many of them have been identified and studied upon. One of these factors is the decoy effect (also known as asymmetric domination effect) which dictates that the consumers decision between two equally desirable options can be influenced with the introduction of a third, inferior option, and the consumer will choose the option that the inferior option mostly resembles. There have been many studies of decoy effect, this review will focus on many different aspects of it and its position in our decision making process. The review will also discuss the limits, Boundaries and rules that the decoy effect is subjected to, as well as the effect of product category …show more content…

However first we must understand the decoy effect and its components to understand the role each plays in decision-making. The decoy effect is known through many different names such as context effects, asymmetrical domination effect and the reference effect. But its essence the decoy effect is when a preference is altered due to the introduction of third new option to choose from. According to the asymmetric dominance effect the addition of a decoy option that is inferior on all attributes compared with one of the initial options but not compared with the other can lead to an increase in the preference for the first, dominant option (the target), compared with the second non-dominant option (the competitor) (Bhatia, …show more content…

Malkoc (Malkoc, 2011) conducted a study in 2011 that focuses on the conditions in which the attraction effect would not occur, especially when the attraction effect is demonstrated among unattractive alternatives. Malkoc starts by telling us how the decoy effect has been proved numerous times to be an active ingredient in making all kinds of decisions, ranging from the purchase of consumer products, to voting for political candidates and even gambling however there are some present boundaries that have not been fully researched upon. They hypothesis constructed by Malkoc was to determine if the attraction effect is present in choice sets that are undesirable due to constraints such as limited finances or options present, and if the introduction of an asymmetrically dominated option has any effect in creating a bias for the consumer (Malkoc, 2011). The hypothesis is based on the fact that negative emotions greatly effect the amount of information researched before a choice set and results in more attention to detail. As Malkoc puts it, “this suggests that consumers in negative moods proves information more vigilantly, which might increase accuracy and decrease context effects” (Malkoc, 2011). In its essence the attraction effect occurs when one of the options in the choice set is viewed negatively when compared to one of the other two options, however if all the options in the choice set are viewed as unattractive or negative, the decoy has no

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