Latest / The Pricing Marketing Podcast with Fexingo: Price Anchoring, Bundling, and Conversion Pricing
How Decoy Pricing Pushes You to the Expensive Option
In this episode of The Pricing Marketing Podcast, Lucas and Luna explore the decoy effect — a pricing strategy where a deliberately unattractive third option makes a higher-priced product seem like a bargain. Using the classic 1982 Economist subscription experiment by Dan Ariely as a starting point, they break down how decoys work in SaaS tiered pricing, movie theater popcorn combos, and even charitable donation tiers. Lucas explains why the decoy disrupts rational value comparison by creating a dominance relationship, and Luna questions whether customers eventually wise up. They also discuss…
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