How the Decoy Effect Tricks Your Brain: Understanding Cognitive Biases in Decision Making
October 03, 2025Categories: Psychology and Decision Making, Podcast Episode
The Biased Brain Podcast with Owen Hawthorne
Explore the intriguing world of cognitive biases and human cognition in this engaging podcast. Discover how bias in decision making shapes our perceptions and influences our choices. Join us as we delve into the science behind critical thinking and biases, providing practical insights to enhance your understanding and control over your thought processes. Whether you're a psychology student or curious observer, this podcast offers valuable tools to help you unveil the hidden biases in your mind.
The Decoy Effect: Why Your Brain Gets Tricked (And How to Spot It)
Hey, have you ever noticed how sometimes when you’re trying to pick between two options, a third option suddenly appears out of nowhere—and that third option just makes one of the first two choices look way better? That’s called the Decoy Effect, and it’s a super interesting example of how our brains don’t always play fair when it comes to decision making.
Imagine you’re at a coffee shop, staring at two sizes of iced coffee: a small for $3 or a large for $5. You’re thinking maybe the small is enough, but the large sounds like a better value for the price, except it’s a bit much. Then, the barista adds a third option—a medium for $4.75. Suddenly, that medium looks kinda pointless, right? It’s almost as expensive as the large but smaller. This third “decoy” option actually nudges you to want the large, which suddenly feels like a smart deal.
This sneaky brain trick is what psychologists call the Decoy Effect. It’s one of many cognitive biases—systematic errors in our thinking—that influence how we make decisions without us even realizing it.
How the Decoy Effect Plays Out in Real Life
So what’s happening here from the standpoint of human cognition? When we're faced with choices, our brains tend to compare not just the options themselves but also the context around them. The decoy option is designed to be clearly worse than one choice (the target), but not so bad that it’s completely ignored. This makes that target choice seem more attractive—kind of a psychological trick to “push” us a certain way.
Here are a few examples you might find really relatable:
- Subscription Plans: Streaming services or software companies often offer three tiers. The cheapest plan is basic, the expensive one has all the features, and then the “in-between” plan is priced to make the expensive plan look like a much better deal.
- Gadgets and Electronics: Sometimes a mid-level model of a smartphone or TV is priced closely to the premium model, making the premium seem like a no-brainer upgrade.
- Menus at Restaurants: Ever seen a menu where one dish is way overpriced but otherwise similar to others? That’s probably a decoy, making other entrees look more reasonable.
All these examples highlight how the decoy effect uses our brain’s challenge with bias in decision making— we don’t just evaluate choices in isolation. Instead, our preferences shift depending on the “context” or new options added, which can make us less rational than we’d like to think.
Why Does This Matter? Understanding Cognitive Biases
Recognizing the Decoy Effect is a step towards sharpening your critical thinking and biases skills. It’s a small but powerful reminder that human cognition doesn’t always follow logical patterns. Our brains are wired to compare, contrast, and sometimes get led down biased pathways, especially when emotions or sales tactics get involved.
By learning about this and other cognitive biases, you can start making choices that better align with your true values and goals, rather than being nudged unknowingly by cleverly positioned options.
If you want to explore this concept a bit more, especially how it fits into the bigger picture of cognitive biases and the quirks of human thinking, I highly recommend checking out the book, The Biased Brain by Bo Bennett, PhD. It's packed with fascinating insights into why our brains work the way they do—and how understanding cognitive biases can help you think more clearly every day.
Explore the book and unravel the secrets of your mind today by visiting https://www.thebiasedbrain.com. It’s a great way to get a grip on the many biases that shape our decisions and learn to outsmart the tricks your own brain plays on you!
Next time you’re picking a product or service, keep an eye out for suspiciously placed “decoy” options. Recognizing the Decoy Effect is like having a little mental superpower when it comes to navigating the world’s endless choices.
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Mitigate the Effects of Cognitive Biases and Become More Reasonable
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