Everyone picks the cheapest plan
Add a strategically bad option that makes your preferred plan look like an obvious deal. It's behavioral economics in action.
When to use
You have tiered pricing and want to shift more users toward a specific plan without changing actual prices or features.
Hypothesis template
If we add a decoy option priced at fill in: amount next to our preferred plan at fill in: amount, more people will choose the preferred plan because the comparison makes it look better.
Method
The problem: You offer two plans. Everyone picks the cheaper one. You need people to see the value in the higher tier.
The Economist experiment: Dan Ariely tested The Economist's pricing:
- Option A: Web only — $59
- Option B: Print only — $125
- Option C: Print + Web — $125
Nobody picked B (print only for same price as print + web). But when B existed, 84% chose C. When B was removed, most chose A. The "useless" option changed everything.
Why decoys work:
- Humans don't judge value in absolute terms—we compare
- A bad option makes a nearby good option look amazing
- The decoy creates an "obvious" choice, reducing decision anxiety
- It doesn't need to sell—it just needs to exist
How to apply it:
- Identify your preferred plan (the one you want most people to choose)
- Create a decoy that's similar price but clearly worse
- The decoy should be close to the target plan to invite comparison
- Test: show pricing with and without the decoy and measure plan distribution
Common decoy patterns:
- Same price, fewer features (The Economist)
- Slightly cheaper, much less value
- More expensive, barely more value (makes mid-tier look great)
Key insight: You're not tricking anyone. You're making the comparison easier. The "best" option is genuinely the best—the decoy just makes that obvious.
Success metrics
- •Plan distribution (which plan gets chosen)
- •Average revenue per user
- •Pricing page conversion
- •Customer satisfaction with plan choice
- •Revenue change after adding decoy
Prerequisites
- Tiered pricing page
- Enough traffic to measure changes
- A/B testing capability
- Understanding of which plan you want to promote
Common pitfalls
- •Making the decoy too obviously fake
- •Not A/B testing the change
- •Overcomplicating with too many options
- •Changing the decoy too often (confuses returning visitors)
Source: The Economist. Decoy pricing shifted 84% of buyers to the premium plan.
Suggested ICE scores
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