The principle. Asymmetric dominance, aka the decoy effect. When you offer 2 options, prospects compare them on every dimension. When you add a 3rd option that's strictly worse than the option you want them to pick, their brain takes the shortcut: "well, B is obviously better than C — and only slightly different from A — so B."
The Economist's famous case study.
Original pricing:
- Web only: $59
- Print + Web: $125
Conversion split: 68% picked Web, 32% picked Print + Web.
Add a decoy:
- Web only: $59
- Print only: $125 ← decoy (same price as bundle, less product)
- Print + Web: $125
Conversion split flipped: 16% picked Web, 0% picked Print only, 84% picked Print + Web.
Same two real options. Adding the decoy increased the target option's selection by 2.5x. The decoy itself sold zero units — it was never meant to.
How to build a decoy in your pricing.
- Identify your target option — the one you actually want them to choose.
- Build a decoy that's strictly worse on at least one dimension and equal-or-worse on the rest, at a similar price to the target.
- Place the decoy adjacent to the target in the lineup — visual proximity strengthens the comparison.
Example for a SaaS. If you want them to pick Pro at $200/mo, your decoy could be Starter+ at $180/mo with half the seats. Side-by-side, $20 more for double seats is an obvious yes.
The ethical line. This is engineering choice architecture, not deception. Every option you offer should be a real, deliverable product. The decoy can't be a phantom you'd refuse to sell. If they pick it, you ship it.
Where it fails. Sophisticated B2B buyers (CFOs, procurement) will spot a decoy. Use it on transactional and SMB sales; drop it for enterprise where buyers will scrutinize.