The Decoy Effect: Popcorn Pricing & More

The Decoy Effect or the Asymmetric Dominance effect is a phenomenon whereby consumers will have a specific change in preference between 2 options when also presented with a third option. 

Source: Wikipedia

National Geographic conducted an experiment in a movie theater where consumers were presented with 2 Popcorn pricing options. A Small for $3 and a Large for $7. Consumers preferred the Small Popcorn.

An additional variant Medium at $6.50 was added between the two. Buyers now had a distinct change in preference and opted for the Larger Popcorn.

The Decoy effect is used extensively by Marketers in Pricing Strategy.

Read more:
How to use Decoy Effect to help buyers choose the right option

Watch the Nat Geo video here:

Also, watch how Economist used this effect to designed its subscription model:


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