The Decoy Effect That Tricks Your Brain into Spending More

Behavioral Economics with Fexingo: Decision Making, Bias, and How People Really Spend · Jul 25, 2026 · 7m · transcript

Why does a third, seemingly irrelevant option change what we choose? This episode of Behavioral Economics with Fexingo unpacks the decoy effect, the pricing trick that makes one option look irresistible. We start with a classic experiment from Dan Ariely: The Economist magazine subscriptions. When offered a web-only subscription for $59 and a print-plus-web subscription for $125, most people chose the web-only. But add a third option — print-only also for $125 — and suddenly everyone wants the print-plus-web. That third option is a decoy. We explain the psychology of asymmetric dominance, why…