The trick that makes you overspend When you buy a cup of coffee, you might have noticed that of the three size options — small, medium and large — the medium-sized serving often costs almost as much as the large. Given the apparent bargain, have you ever opted for the biggest and most expensive option? If so, you have been nudged by a cognitive bias known as the “decoy effect”, in which the deliberate presentation of an additional, slightly less attractive option — in this case, the relatively expensive medium-sized coffee — pushes you to pay out more money than you would have rationally chosen. The decoy effect shows us just how easily our judgement is swayed by the context in which the facts are presented — even when that additional information may have no bearing on the overall judgement. By learning about the decoy effect, you may become less susceptible to this unconscious influence. You may even discover ways to put it to your own use as a tool for persuasion. If you are discussing travel plans with friends, for instance, and haven’t decided yet where to go, you might present two alternative arrangements at your city of choice, but one with a slightly more expensive hotel. Even if your friends might have otherwise selected a different location, the comparison might just prime them to opt for your preferred option. Just don’t be a victim of it yourself. Whether you are buying headphones or deciding on a retirement plan, deliberately ask whether you are really choosing the option you need or want, with the attributes you were originally seeking, or whether you were distracted by a deliberately unappealing alternative. Like an expert sniper trained to avoid false targets, you may find that your judgement suddenly becomes a lot more incisive. Q:If you go to Starbucks to buy a cup of coffee, which size of coffee do you prefer and why?