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The Economist: a pricing experiment

Published on June 29, 2017 Originally recorded 2010   2 min
Decoying. Now, this can come across as perhaps one of the most gimmicky techniques, but, believe me, there's real value in here. To illustrate what decoying is, I'm going to show you an example of an experiment that was done on the Economist website. Here we have a standard subscription page with two options. You can subscribe to Economist online for $60 or for the print and the online version for $125. Perhaps as you expect only 32% of people went for both the print and the web version, but 68% went for the online and cheaper version. The experiment was repeated but this time,
with a Decoy inserted. We still have the economists online only 15 for $60 and we have the print and the web version for $125, but we now have an additional print-only subscription for $125. What effect does this Decoy have?