Explaining the Attraction Effect: An Ambiguity-Attention-Applicability Framework

The attraction effect describes a phenomenon where the addition of a third option (i.e., a decoy) to a set containing two alternatives (target and competitor) enhances the choice of the alternative to which it is most similar. For example, suppose a target and competitor offer a tradeoff between two attributes, such that the target has a better price but the competitor has better quality. Adding a decoy that is similar but inferior to the target increases the share of the target (Huber, Payne, and Puto 1982). The attraction effect has been of both practical and theoretical interest to marketing researchers for several decades. While the attraction effect has been robustly demonstrated with numerical stimuli, recent work has shown that it is difficult to find with perceptual stimuli (Frederick, Lee, and Baskin 2014; Yang and Lynn 2014). Failures to observe this effect with such stimuli point to gaps in understanding this effect (Simonson 2014). The contributions of the present research are twofold. One, we develop a cohesive framework specifying the necessary conditions for the attraction effect to occur, regardless of whether the stimuli are numerical or perceptual. The attraction effect requires ambiguity in choice, attention to the target-decoy comparison, and applicability of the decoy as a standard for evaluating the target. We refer to these three factors as the A3 framework. Two, by drawing on insights from this framework, we demonstrate the attraction effect with perceptual stimuli similar to those that failed to produce this effect in prior research. In doing so, we systematically test the ambiguity, attention, and applicability factors as distinct and necessary conditions for the attraction effect.