Coffee Choices and the Decoy Effect. Have you ever bought a coffee and been ‘bedazzled’ into getting one bigger or frothier than you’d planned? “It seemed much better value to have the Maximo Grande…”. Basically you’ve had your behaviour ‘modified’ by the retailer using Decoy Pricing or the Decoy Effect. I’ve fallen for it, many times.

You might now be thinking “that’s terrible, they are manipulating my behaviour to maximise their profits. Does it happens across the retail sector?” Sadly, yes it does.

But Wait! Before you get too indignant pause. What if this is happening closer to home, at work?

What if the Decoy Effect is embedded in PRINCE2 processes?

What if the process of making the ‘right’ decisions in a business case is just another case of people using the Decoy Effect?

Influencing the behaviour decision makers to get the answers project managers want?

Shocking!

Let’s Play the Business Case Options Appraisal Game. One way to spot a Decoy in business plans is to run through an example.

The Scenario: You’ve gone through bureaucratic hell to getting a pilot project approved. You are now returning to the (insert name here) Committee for implementation approval.

The Punters: The Committee need to feel like they have made the ‘right’ choice. They also need to look compliant with process. Make it easy for them to ‘do the right thing’.

Player 1 (You): You just want your favourite idea approved so that you do what you think is important.

Tactics: Use the Decoy Effect to get them to make the right decision. I’ve illustrated this in a handy guide below.

How to Spot a Decoy. Apologies if anyone is feeling aggrieved I’ve suggested they might be ‘playing a game’ with carefully crafted business cases. I’m sure that most people are ‘straight down the line’ on options appraisals.

Raising this is just about helping people make better decisions.

Helping decision makers recognise that there might be some unscrupulous types in the world. ‘Messing with their heads’, and trying to get what they want by using the Decoy Effect.

In the sprit of helpfulness, here are some pointy questions an Approvals Committee might want to ask about an options appraisal. You can do this if you suspect the Decoy Effect, or just make it routine practice.

1. Just the 3 Options? Why aren’t there any more? (try to remove a bit of the asymmetry)
2. Option 3 looks a bit extreme? If something looks like lunacy compared to the others – it’s probably a Decoy. Reject it and ask for something a bit more in tune with reality.
3. Do we really need ‘Do Nothing’? Take it for granted that we can stop this project if we really need to. Replace ‘Do Nothing’ with a realistic ‘Do Something Useful’ option.
4. Why are they all so ‘similar’? Why are the options all just increasingly more expensive versions of the same thing? Is this just adding ‘whistles and bells’? Are there any other possibilities?
5. Were there any failures? Did you try anything that didn’t work? What did you learn from that experiment?
6. (NEW) Who did you talk to? Give us a picture of the variety of experience and ideas that surfaced during the development of these options. What sort of Trojan Mice emerged? (More on Trojan Mice here) Thanks to Diana Reynolds
7. (NEW) How wide was the thinking? What were some of the completely potty ideas you considered at the beginning of this? Gives a sense of how widely people have been thinking, or is it just a narrow favourite? Thanks to @ComplexWales.

There will be plenty of other questions that people could ask, feel free to add them in the comments and I’ll include them on the list.

Ultimately its about having a bit of healthy skepticism and keeping your nose open for the smell of ‘Trojan Horse Poo’. Is someone trying to roll their favourite Trojan Horse past you by deploying the Decoy Effect? Sorry to mention Trojan Horse Poo, but I have written about them and Trojan Mice previously (link here).

Asymmetrical Dominance Effect. If you fancy a bit of a deeper dig into the world of the Decoy Effect you can have a look at the Wikipedia entry, here. If you want to go deeper still, there are plenty of research papers, try this: The asymmetric dominance effect: Re-examination and extension in risky choice – An experimental study from the Journal of Economic Phycology (August 2019).

From a personal perspective I’ve gone for something a bit more relatable, Sheds.

Here’s my attempt at trying to explain the Decoy Effect in Business Cases through the medium of Sheds.

So, What’s the PONT?

1. When we are faced with choices – the range of options available influences our choice. Beware of Decoys.
2. Extreme options at either end of a range of choices can make some things appear more favorable. The ‘Decoy’ pushes us towards something we might not have chosen.
3. The Decoy Effect isn’t limited to retail choices. Look out for it in Business Case Options Appraisals and ask pointy questions.