How pricing quietly nudges you to spend more.

The decoy effect — also called asymmetric dominance — is a cognitive bias where your choice between two options changes the moment a third, less attractive option appears. It shows up constantly in pricing and menus.

Start with two options, A and B, that differ on price, size or features. Now introduce a decoy: deliberately designed to be clearly worse than one of them. Suddenly the option it resembles looks like the obvious win, and preferences swing toward it — even though nothing about the original two changed.

It's why so many products sell in three tiers: a basic plan, a premium plan, and a decoy priced near premium but with fewer features. The decoy makes premium feel like the smart buy. Understanding the effect helps businesses design honest choices — and helps customers spot when a comparison is being staged for them.