It’s Monday, I’m Nithya Sudhir. I collect words, chase patterns, and write about whatever makes me curious.
Sold, but not meant to be bought.
Last week, I was choosing an internet plan from my new service provider and there they were, the three magic words:
Basic. Standard. Premium.
Followed by golden question: “Which one would you like?”
Apart from Tall, Grande, Venti, I think these might be the most spoken words in the consumer-driven world.
They show up everywhere. Streaming subscriptions. Phone plans. Software tools. Gym memberships. Even toothpaste packs.
Even though there are three options, somehow, there’s always only one right answer.
And it’s got a lot to do with branding and - you guessed it - psychology!
Hello! It’s Monday again. Let’s get into this.
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Who needs rationality?
Daniel Kahneman said, “The way choices are framed profoundly affects the decisions people make.”
Touché.
In an experiment, Dan Ariely (a behavioral economist and professor known for studying why humans make irrational decisions and author of Predictably Irrational) asked his students to pick from the three plans of The Economist:
$59 for an online subscription
$125 for a print-only subscription,
and $125 for both print and online.
With all three options on the table, 84% of students chose the most expensive plan, and no one chose the print-only option.
Then, Dan Ariely removed the option nobody wanted and asked another group of students to pick from the remaining two:
$59 for an online subscription
and the $125 plan for both print and online.
This time, 68% picked the $59 online subscription, and only 32% picked the print & web subscription.
In Ariely’s words, “The most popular option became the least popular, and the least popular became the most popular.”
Simply adding a decoy nudged them to spend almost $70 more on something…they didn’t really need.
Not, the chosen one
That right there is called the Decoy Effect.
The decoy effect describes how, when we’re choosing between two options, adding a third, clearly less attractive one changes how we see the first two.
Decoys are “asymmetrically dominated:” they are completely inferior to one option (the target) but only partially inferior to the other (the competitor). For this reason, the decoy effect is sometimes called the “asymmetric dominance effect.”
Simply put, it means:
One, we don’t choose based on what’s best, we choose based on what looks best compared to something worse.
And two, the “worse” option isn’t there to be chosen at all. It exists purely to make another option feel like the smartest decision in the room.
Time as the Decoy
Brands use the decoy effect in more ways than we realize.
One of the most common is through subscription duration.
You’ve seen this one everywhere.
Usually it looks like this:
Monthly
6 months
12 months
At first, it feels like a simple time decision.
“How long do I want to stay subscribed?”
But psychologically, each option starts to mean something else:
Monthly feels impulsive, expensive, and short-sighted.
12 months feels smart, committed, and financially responsible.
6 months sits awkwardly in between.
The 6-month plan often becomes the decoy.
It’s not bad enough to reject. But not good enough to choose.
Snacks first. Decisions second. Decoy always.
SnackCrate is a subscription service that delivers curated snack boxes from around the world right to your door. Each month features a different country’s snacks — a mix of sweet, salty, savory, and unique local treats that you often can’t find in typical grocery stores.
They use the replenishment subscription model to turn curiosity into habit.
Instead of a one-time experience, the product is designed to feel ongoing, expected, and part of a routine.
So, you’re not just “trying a box.” You’re signing up for a monthly moment of discovery.
That matters because replenishment models perform differently from curation models.
Around 32% of all subscription boxes are replenishment-based, and 45% of subscribers stay for at least one year — about ten percentage points higher than curation or access services.
The many disguises of the Decoy effect
Product Bundling
What: Selling multiple products together as small, medium, and full sets.
How the decoy works: The smaller bundles make the full bundle feel like the only “complete” and sensible choice.
Feature Gating
What: Limiting key features to higher plans or versions.
How the decoy works: The restricted version exists to make the full version feel emotionally necessary.
Quantity Packs
What: Selling 1-pack, mid-pack, and large-pack options.
How the decoy works: The awkward middle size makes the largest pack feel like better value.
One-Time vs Subscription
What: Letting customers buy once or subscribe.
How the decoy works: The one-time option makes the subscription feel like the “grown-up” choice.
Quality Tiers
What: Selling standard, premium, and elite versions.
How the decoy works: The middle tier makes the top tier feel justified.
Add-On Ladders
What: Offering small upgrades and bigger upgrade bundles.
How the decoy works: The small add-on makes the full upgrade feel like closure.
Once you notice how choices are shaped, you stop seeing prices and start seeing design.
All of this isn’t to say that we don’t have a choice. We absolutely do. And those choices matter.
What’s fascinating is how thoughtfully the space around those choices is designed, how comparison, contrast and context quietly guide our minds toward what feels like the most natural path forward.
So there you go, once again: Basic. Standard. Premium.
Which one do you think I chose? 😛
How's the depth of today's edition?
As always, hit reply if something in here hits home.
See you next week,
Nithya
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