The Decoy Effect: Evidence from Consumer Pricing Decisions

Author(s)	Aadya Kalia
Country	India
Abstract	This study investigates the effectiveness of the decoy effect in influencing consumer decision-makingunder different pricing conditions. An online survey was conducted among 91 participants usinghypothetical scenarios involving streaming service subscriptions and fast-food meal plans. Participants made purchasing decisions under control, discount, and markup conditions before and after beinginformed about the decoy effect. The results suggest that the decoy effect influenced purchasingdecisions, with discounts increasing preference for the target option and markups reducing itsattractiveness. After participants became aware of the pricing strategy, its influence weakened. Only minor differences were observed across age groups and gender, while ethical perceptions of personalisedand decoy pricing were generally neutral. These findings highlight the importance of pricing strategiesand consumer awareness in shaping purchasing behaviour.
Keywords	Decoy effect; Consumer behaviour; Personalised pricing; Consumer awareness; Pricing ethics
Field	Sociology > Economics
Published In	Volume 8, Issue 5, September-October 2026
Published On	2026-09-24

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