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Choices often occur relative to what is on offer rather than based on absolute preferences. The decoy effect is technically known as an ‘asymmetrically dominated choice’ and occurs when people’s preference for one option over another changes as a result of adding a third (similar but less attractive) option. For example, people are [...]
* This introduction was originally published in the Behavioral Economics Guide 2014. To learn more about the subject and the latest ideas, please download our free annual Behavioral Economics Guides. By Alain Samson, Ph.D. Introduction Think about the last time you purchased a customizable product. Perhaps it was a laptop [...]
This term coined by Thaler and Sunstein (2008) refers to the practice of influencing choice by “organizing the context in which people make decisions” (Thaler et al., 2013, p. 428; see also nudge). A frequently mentioned example is how food is displayed in cafeterias, where offering healthy food at the beginning of the [...]
