The Decoy Effect

An 'objectively-unsuitable' option will change the value proposition for the others.

Similar psychology:

Hyperbolic Discounting

Fresh Start Effect

Confirmation Bias

Likely impacts:

Perception of Value

Purchases

Last updated: 23/09/2026

How to utilise this in your designs

When users cancel over price, you could show the annual plan's saving beside the monthly cost, so the comparison works much like the decoy effect.

Cancel Subscription UI with feedback options on left; the first option, "The subscription is too expensive," circled in orange with arrow pointing right. Right panel offers annual plan saving 49%, pricing details in white box with blue border, orange "Switch to Annual" button, monthly plan "Keep Monthly" option.

Example from

Strava

During an upsell, you could badge the specific feature a user previously trialled, then test a decoy tier without it, so the full tier feels like better value.

Subscription change UI shows Business and Team plans. Business selected with purple radio, "You trialed this plan," and "Looking for this?" highlights near Unlimited members, Custom dashboards.

Example from

Sentry

At cancellation, you could frame the current deal against the features the team would lose, a comparison that, like a decoy, makes staying feel like better value.

Canva cancellation UI shows a warning about price increase from $12.95 to $29.99/month, highlights lost features, with "Keep Canva for Teams" and red "Continue cancellation" buttons.

Example from

Canva

Even on the final checkout page, you could remind users they're getting a good deal, giving a reference point that, like a decoy, makes the price feel better value.

Booking review UI shows a "Luxury 3 Bedroom Scandinavian Lodge," dates, guests, price £548.80 GBP, with green text: "Your price is below the 60-day average," and non-refundable policy.

Example from

Airbnb

Possible impacts

Adding a deliberately poor-value decoy tier could make other packages feel like better value, even though their actual price and contents haven't changed.

As seen in:

Sentry Upselling a specific feature

Canva Framing a cancellation

The decoy effect might steer more customers towards pricier tiers or bundles, potentially increasing average basket size and making the decision quicker.

As seen in:

Sentry Upselling a specific feature

Canva Framing a cancellation

Written by Peter Ramsey

Consultant to 100+ companies

Published: 20/07/2023