When Decoy Pricing Strengthens the Target Offer
Decoy pricing strengthens a target offer when a nearby alternative makes the preferred option easier to compare and justify.
A decoy does not need to win the sale to affect the decision. Its commercial role is to change the comparison between the offers the customer is actually considering.
The effect is strongest when the target clearly dominates the decoy on value at a similar price.
- The decoy creates an easier comparison. Customers can identify which option offers more value without estimating absolute worth.
- Price proximity matters. A decoy priced near the target makes the value difference easier to see.
- A weak decoy can create suspicion. The comparison loses credibility if the inferior option appears intentionally unrealistic.
Decoy pricing works through relative choice, so the structure around the target matters as much as the target itself.
The episode examines how a decoy anchor.
