B.E. For Dogs: Decoy Effect!

B.E. for Dogs is a bi-weekly comic series that will examine concepts in behavioral economics from the perspective of our canine companions. Look out for new comics every other week!

The series is created by Matt Trower, Catherine Berman, and Jamie Foehl.

Decoy Effect: Ivy the pup is having a tough time deciding between two really fun toys. One way to help her choose a particular toy is to provide a third option that’s just like one of the original choices but a little bit less enticing. This third option is called a “decoy” because we don’t expect anyone to choose an inferior option. The simple presence of the decoy enhances the attractiveness of one of the existing options. A good place to look for a decoy option is in price lists or menus. Check out this 1995 paper to learn about experiments on “asymmetric dominance” (AKA “the decoy effect”.)