BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -The two products with the similar prices should be the most expensive ones, and one of the two should be less attractive than the other. This strategy will make people compare the options with similar prices; as a result, sales of the more attractive high-priced item will increase.

Detailed explanation-2: -What is the Decoy Effect? It’s a pricing strategy that businesses use to get us to switch from one option to a more expensive or profitable one for them. The Decoy Effect occurs when the preference for one of two options changes dramatically after a third similar but less attractive option is added.

Detailed explanation-3: -One clear example of the decoy effect is popcorn at the cinema. When there are only two options, a large or a small bag, the customer will conclude that the large one is very expensive and that they do not want that much popcorn. They will be buying based on their needs.

Detailed explanation-4: -In marketing, the decoy effect (or attraction effect or asymmetric dominance effect) is the phenomenon whereby consumers will tend to have a specific change in preference between two options when also presented with a third option that is asymmetrically dominated.

Detailed explanation-5: -The decoy effect describes how, when we are choosing between two alternatives, the addition of a third, less attractive option (the decoy) can influence our perception of the original two choices.