We often spend without thinking too much about it. However, whether you know it or not, there's a main psychology element that comes into play when you're spending--it's called the decoy effect!

Here's an example of what we mean...

When you go to the cinema and they offer three popcorn sizes, small, medium and large, most people go for the large. Why pay a certain amount for a medium when just a little bit more money gets you more popcorn (large)?

That's exactly it! The medium popcorn isn't meant to be picked. It is a decoy, because its only function is to make the large look like a no-brainer. 

You may think you have free will, but in actuality, that will was shaped. 

Many establishments practice the same effect, restaurants, FMCG brands and above all, tech companies--they're the masters of the theory. 

Two iPhones are hard to choose from, add in a third, and suddenly you know exactly what you want.

So, why do we do this?

It's because it's not really about value, it's about contrast. We choose what feels smarter, next to the less smarter choice. Nobody wants the decoy, it is merely there to make you spend more. 

This isn't to say that your brain is lazy, it's just that your brain doesn't want to spend the time evaluating worth. It just wants a reason to decide. 

Brand tip

So, if you're a brand looking to sell, then remember that it's not about offering more, it's about smart pricing via framing choices. 

Use decoys, and you would be able to guide your customers to not the option they want, but the option you want them to want.