Dan Ariely ran a famous experiment with 100 business students. He offered three subscriptions to The Economist:
Web only: $59. Print only: $125. Print plus web: $125.
16 picked web. Zero picked print-only. 84 picked print plus web.
Then he removed the print-only option nobody wanted. Now it was $59 web versus $125 print plus web. Result: 68 picked web, 32 picked the bundle.
Nothing about the two real options changed. But adding a third option nobody buys flipped the winner.
That is the decoy effect. We do not judge prices on their own — we compare. Print-only at $125 made print-plus-web at $125 look like a steal. Take the decoy away, and suddenly $59 looks like the smart buy.
One honest note: this was a classroom demo, not a lab trial. But the underlying effect is peer-reviewed and real, and marketers use it every single day. Look at any “good / better / best” pricing page. The middle option is the one they want you to buy. The expensive one is the decoy that makes it look reasonable.
We think we choose with logic. Mostly, we choose by comparison.