I was pitching a prospective client last month, a small local service business who needed some important web development work.
My project manager laid out two packages: a lower price starter option that covered all their “core needs”, and a higher price comprehensive one that included all of their “wish list” items.
Both solid. Both profitable for my team.
Then, trying to be helpful, I mentioned a third option: a bare-bones package that honestly wouldn't move the needle much.
While the client ended up choosing the higher package, I not sure they would have if I hadn't mentioned that bottom-level “bare bones” option.
The reason I believe that is because of something called the Decoy Effect.
It's the cognitive bias where introducing a third, strategically inferior option makes one of your original choices suddenly look way more attractive.
The decoy isn't there to be chosen. It's there to make you feel better about choosing the thing someone wanted you to pick all along.
Our brains don't evaluate options in isolation, we compare them.
And when a clearly worse option appears, it changes how we perceive everything else on the table.
Research suggests that making a choice influenced by a decoy doesn't just reveal what we like, it can reshape our preferences in the moment.
We don't just pick differently; we convince ourselves the chosen option was what we wanted all along.
We see this everywhere. Magazine subscriptions where the "print only" option is the same price as "print + digital”. Suddenly the combo feels like a steal.
Job candidates where one person is slightly underqualified, making another look like the obvious choice.
Dating apps showing you a few less-compatible matches right before the one they think you'll swipe on.
The interesting thing for networking and social dynamics is we do this to ourselves and each other all the time.
When you're introducing two potential collaborators to someone, the way you frame a third person (even casually) can shift how the first two are perceived.
When you're positioning yourself in a conversation, mentioning someone else's less relevant experience can make yours seem more valuable by comparison.
And here's the kicker, our susceptibility varies based on individual neural differences, meaning some of us are more vulnerable to these mental shortcuts than others.
In that high-stakes networking event or tense client negotiation, the decoy effect is working on someone in the room. Possibly you.
So what do we do about it?
First, notice when a third option appears out of nowhere. If you're suddenly looking at three choices when you started with two, ask yourself: is this new option actually viable, or is it just here to make one of the others look better?
In business conversations, in hiring decisions, even in social situations, if someone introduces a "decoy" person or idea, pause before you let it reshape your thinking.
Second, strip away the context and evaluate each option independently. Before you wrap up for the week, try this: when you're facing a decision, write down what you actually need.
Then look at each option against that list, not against each other.
Does the "premium" choice actually deliver what you need, or does it just look good compared to something worse?
Third, pay attention to how you're framing choices for others. If you're presenting options to a client, a team member, or even a friend, check yourself.
Are you including something just to make your preferred option look better? It works, but it also erodes trust when people figure it out.
The decoy effect isn't about being manipulated by evil marketers, it's about recognizing that our preferences are way more fluid than we think.
Every time we choose, we're not just revealing what we want, we're creating it.
Use this weekend to notice where you see it. You'll spot it everywhere once you're looking.
Did this resonate with you? Forward it on to someone who could use it too. These insights are better when shared.
Cheers,
Alex
Disclaimer: I'm a curious researcher, not a licensed psychologist. I study these concepts because I believe understanding how our minds work can help us navigate life more effectively. This content is for educational purposes only and should not replace professional advice. Please consult qualified professionals for personal guidance. Individual results may vary, and readers should use their own judgment when applying these concepts.