How to rig a selection process

I written several times recently about people actually disliking having to make choices, contrary to most claims, since the worry about making the wrong choice usually outweighs the perceived benefit of having more choice!

Seth Godin
highlights a counter-intuitive method for simplifying choices - by adding more choices! The technique is called the "decoy effect".

There are two wines for sale at dinner: $9 a bottle or $16 a bottle. Which one do you order?

Now, imagine that there are three, and the third is $34. Are you more likely to buy the $16 bottle now? Most people are.

As he points out, competition is almost always a good thing, and marketers can create it... or highlight it.

The Washington Post has a piece on this here, from which I've taken the following extract.

Joel Huber, a Duke University marketing professor, showed how the decoy effect works with restaurants. Huber asked people whether they would prefer to eat at a five-star restaurant that was far away or at a three-star restaurant nearby. As with many choices in life, each restaurant had different advantages. If the better restaurant was also nearby, there would be no dilemma. But the question forced people to compare apples and oranges -- trade off quality against convenience -- which ensured no automatic answer.

The human brain, however, always seeks simple answers. Enter the third candidate. Huber told some people there was also a choice of a four-star restaurant that was farther away than the five-star option. People now gravitated toward the five-star choice, since it was better and closer than the third candidate. (The three-star restaurant was closer, but not as good as the new candidate.)

Another group was given a different third candidate, a two-star restaurant halfway between the first two. Many people now chose the three-star restaurant, because it beat the new option on convenience and quality. (The five-star restaurant outdid this third candidate on only one measure, quality.)

What the decoy effect basically shows is that when people cannot decide between two front-runners, they use the third candidate as a sort of measuring stick. If one front-runner looks much better than the third candidate, people gravitate toward that front-runner. Third candidates, in other words, can make a complicated decision feel simple.

posted by John Wilson @ 4:04 PM Permanent Link newsvine reddit



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