The Power of Comparison: How It Affects Decision Making | Hacker News Reader

The Power of Comparison: How It Affects Decision Making

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Restaurant menus are often built around these kinds of comparison effects; it's pretty common, for instance, to have a really expensive item on the menu in order to make the second most expensive thing look reasonably priced in comparison (that being the high-margin entree they really want people to order). A couple of examples, from a pricey New York restaurant and from a chain:

Balthazar's (French brasserie in NYC): http://nymag.com/restaurants/features/62498/

CPK: http://www.walletpop.com/2010/01/15/secret-restaurant-menu-t...

More on this sort of thing (a lot more) can be found in, e.g., Predictably Irrational by Dan Ariely (highly recommended)...

IIRC that's called a decoy strategy. You put the decoy there to make the other choices look better by comparison. It gives you justification for making the choice and forces their decision. I read this book in college: http://www.amazon.com/Influence-Psychology-Persuasion-Busine... It goes through a bunch of different tactics used in marketing/advertising/sales such as foot in the door, door in the face, etc etc. Once I read it, it really gave me a new perspective on how often people are trying to manipulate our choices.

I remember seeing a previous article on HN talking about how you should have 3 products to sell instead of 1, because it helps to anchor the customer when they make a decision. That makes a lot of sense when you consider the study shown in the article about how people valued two books in isolation and then relative to each other.

One thing to possibly take away is that if you have a more "featureful" product (like the 20,000 entries v 10,000 entries) that's not as nice, people will be willing to pay more for it, if it is next to a nicer "less featureful" product. Obviously, this might only work in limited domains, like the dictionary example, but food for thought if you're selling your own product or one on eBay. And whether people would actually end up buying the 20,000 word dictionary instead of the 10,000 word dictionary is another question entirely.

That's because it's difficult to evaluate anything in an absolute way. You make decisions relative to each other, based on the information you have at the time. In your example, of selling three products, they usually price the middle product higher to make the third option more attractive by comparison and without the middle product people are more likely to go with the cheaper option. The middle option is the decoy. They don't expect anyone to buy it and they don't really want anyone to, it's just there to give the buyer a reason to make the choice.

This and many of such psychological effects are described brilliantly in Dan Ariely's book Predictably Irrational. Amazon link : http://www.amazon.com/Predictably-Irrational-Revised-Expande...

He also talks about all the experiments he did to support such claims.

Did anyone else try to estimate the number of pages in the dictionary? (I'm genuinely curious!)

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