Decoy Effect
Matt Rickardโ
Decoy Effectโ
- The Decoy Effect is a cognitive bias that occurs when people are presented with two options, one inferior to the other. The cheap option acts as a decoy, and people are more likely to choose the superior choice if it is presented alongside the low option
- SaaS companies sometimes use the decoy effect for pricing plans. You can see this mostly in startups that are still targeting SMBs. Wix has programs that are 22 "Unlimited" for 5 GB, 45 "VIP" for 100 GB. For $5 extra, you get ten times the storage between Unlimited and Pro. Their business plans are structured similarly