The decoy effect (asymmetric dominance effect) is when the presence of a third, inferior option makes one of the original two options more attractive — even though the decoy itself would never be chosen.

The Classic Example

The Economist once offered subscriptions: web-only ($59), print-only ($125), or web + print ($125). The print-only option was the decoy. Almost nobody chose it — but its presence drove 84% of buyers to the combo vs. 32% when the decoy was removed.

How the Decoy Works

The decoy is dominated by one option (clearly worse) but comparable to another. Its presence makes the non-dominated option look like an obvious winner by comparison — shifting the relative evaluation.

Where You Encounter It

• Cinema popcorn pricing (small/medium/large)
• Software subscription tiers
• Real estate — showing an overpriced house to make the target property look like a deal
• Salary negotiation — presenting a clearly inferior offer to frame the target offer favorably

Defense

Evaluate each option on its own merits before comparing. The existence of a bad option tells you nothing about the value of the others.

Reference:

Wikipedia: Decoy Effect

https://en.wikipedia.org/wiki/Decoy_effect