The decoy effect, known in research as asymmetric dominance, describes how adding a third option that is worse than one existing option but not clearly worse than the other changes which of the original two people pick. The term comes from consumer research published by Huber, Payne and Puto in 1982. On pricing pages, a plan that offers little more than a cheaper plan for nearly the price of a better one can make that better plan look like the obvious choice.
How it works
Choosing between two options with different strengths is hard. When a third option appears that is clearly dominated by one of them, people find it easier to justify the dominant one, and their choice tends to shift toward it.
Plan A: 5 projects, $20
Plan B (decoy): 6 projects, $45
Plan C: unlimited projects, $50
Next to B, C looks like the clear value pick.
(Prices are illustrative.)In practice
Pure decoys are less common in B2B SaaS than in consumer products, because every plan usually serves a real segment. More often, the effect arises from how tiers are spaced. If the middle and top plans differ only slightly in price but substantially in features, the top plan gains appeal. Teams designing tiers should be aware of this, whether or not they intend it.
Research on the decoy effect is mixed outside controlled settings, and replications vary. Treat it as a hypothesis to test, not a reliable lever.
Staying on the right side
A plan offered only to make another look better still has to be a real offer that someone could buy and use. If it exists only to mislead, or comes with hidden limits, it moves toward deceptive design.
Example
Spotting an accidental decoy
Hypothetical survey tool Glimmerwold notices that almost nobody buys its middle plan and many buy the top one. Comparing the tiers, the middle plan costs nearly as much as the top plan but lacks its key integrations. The team decides whether that is the intended effect or a sign the middle plan needs repositioning for a real segment.
Common mistakes
Assuming it will work
Lab effects do not always appear on real pricing pages. Measure plan mix before and after any change.
Plans with no real buyer
A tier no customer would sensibly choose adds clutter and support questions. Every plan should fit someone.
Questions
They are related but different. Anchoring is about a reference number shaping judgment. The decoy effect is about an inferior option changing how other options compare.
