Investigating the Influence of the Decoy Effect in Pairwise Comparison in Terms of Idea Selection in the Product Development Process

Abstract

Abstract Many activities in the new product development requires the decision making to find the final solution from multiple alternatives and make an evaluation. Even methods to support decision maker are available, the decision can go to the wrong direction because of heuristics. “Decoy effect” is a heuristic that appears in a comparison when 2 of 3 alternatives are similar but different in quality. The alternative that is similar but better in quality is possibly selected. The paper aims to understand the decoy effect by investigating it in the pairwise comparison that is a powerful technique for comparing alternatives. In an experiment, 3 ideas for the next generation of apple peeler are compared in pairs with different sequences. An impact of the decoy alternative on the comparison between other two alternatives, is investigated. Results show low impact of the decoy effect in the pairwise comparison, but this effect induces a high chance of selecting the decoy alternative when comparing the results from this study and the previous study by proposing 3 alternatives in the same sequence. Applying pairwise comparison to avoid decoy effect is thus an idea that will be further investigated.

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