The relative preference for a target product over a competitor can be increased by providing a third alternative (a “decoy”) that is clearly inferior to the target but is not necessarily inferior to the competitor. In 3 experiments, we examined the conditions in which these decoy effects occur. When participants reported their preferences immediately after being exposed to the information about them, the influence of decoys on preferences was attributable to the justification they provided for choosing the target over the competitor. (That is, a decoy had an impact if and only if the target was superior to the decoy but the competitor was not.) When participants evaluated each product individually before making their choices, however, they based their preferences on these evaluations. In this case, decoys exerted their influence through their impact on the values that participants assigned to the attributes on which the evaluations were based. This influence was evident even when the decoy was clearly inferior to both the target and competitor. Moreover, it occurred under conditions in which the target and competitor were in different product categories and also when the decoy was in a totally different product domain than the target and competitor.
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