The Decoy Effect: the option nobody picks still counts

The decoy effect, formally the asymmetric dominance effect. · published 1 September 2026

Adding a third option that nobody picks can change which of the other two people do pick, which standard models of rational choice say should not happen. The effect is real and well replicated in the laboratory, but it is context-sensitive rather than a universal lever, and the famous magazine-subscription figures come from a classroom demonstration rather than a controlled study.

The angle

Explains asymmetric dominance — shown by Huber, Payne and Puto in 1982 — where a third option that is clearly worse than one existing choice but not the other pulls preference toward the option that beats it, so the decoy is built to be rejected rather than bought, a shift standard rational-choice models say should not happen (Ariely’s magazine-tier classroom demonstration being the well-known popular illustration, his own demo rather than a controlled replication).

The notes this episode was written from

These are the working notes, unedited. Everything the video states as fact comes from here, and nothing else may be stated as fact. The sections on limits and on what the finding does not show are part of the brief, not an afterthought — see the method.

Demonstrated by Huber, Payne & Puto (1982), “Adding Asymmetrically Dominated Alternatives: Violations of Regularity and the Similarity Hypothesis”, in the Journal of Consumer Research.

The mechanism: adding a third option that is clearly worse than one existing option in every respect, but not worse than the other, shifts choices toward the option that dominates it. The decoy exists to be rejected, not chosen. Its presence changes the share of choices between the two original options, which standard rational-choice models say should not happen.

Dan Ariely popularised it in Predictably Irrational using a magazine subscription price list of three tiers: web only, print only, and print plus web, where print only and print plus web carried the same price. That made print only strictly dominated, and it was the decoy.

In Ariely’s classroom demonstration with 100 students, 84 chose print plus web, 16 chose web only, and none chose print only. With the dominated option removed, 68 chose web only and 32 chose print plus web. These figures come from Ariely’s own demonstration rather than a controlled replication, and should be described that way.

Later research finds the effect is real but context-sensitive. It is weaker or absent for some product categories and presentation formats.

A note on illustrations

Three cinema popcorn sizes, or three coffee cups, are a common way to picture the effect. They are illustrations, not studies. No finding may be attributed to them.