Consumer psychology: The decoy effect, anchoring effect & FOMO – psychological triggers 'pulling the strings' of your purchase decisions

Have you ever walked into a movie theater intending to buy just a small popcorn, but ended up leaving with the large combo because "it's just a little bit more for the biggest size"? Or have you frantically "checked out" an item at 11:59 PM just because of the text "Sale ends in 1 minute"?

If the answer is yes, then welcome to the fascinating world of behavioral psychology. You aren't weak-willed; your brain is simply reacting exactly as master marketers want it to.

In this article, Pazlaris will pull back the curtain on the most common psychological "tactics," helping you understand how they are silently influencing our decisions every day. Whether you're a consumer who wants to shop smarter, or a brand that wants to build an effective and ethical pricing strategy, this is knowledge you can't afford to miss.

1. The decoy effect, anchoring effect & FOMO: The decoy effect - The art of guiding choices

This is the "culprit" in the movie theater popcorn story.

Between the decoy effect, anchoring effect & FOMO, The Decoy Effect occurs when consumers tend to change their preference between two options when a third option—the "decoy"—is introduced. This decoy is designed to be clearly inferior to one of the original options.

Classic case study: The Economist magazine once offered 3 subscription packages:

1. Online-only: $59

2. Print-only: $125

3. Print + Online: $125

Do you see the absurdity? Package #2 is the "decoy." It costs the exact same as package #3 but offers significantly less value. Nobody would choose it, but its very existence makes package #3 (Print + Online) look like an unbelievable bargain compared to package #2. As a result, the majority of users chose package #3, whereas if only options 1 and 3 were available, they would have had to deliberate much more.

Why it works: The human brain is terrible at evaluating absolute value but extremely good at relative comparison. The decoy creates a simple comparison, helping the brain make a quick decision and feel satisfied for having made a "smart choice."

Real-world applications: SaaS (Software as a Service) pricing tables, fast-food combos, tech product lines (iPhone 128GB vs. 256GB vs. 512GB).

2. The decoy effect, anchoring effect & FOMO:  FOMO (Fear of Missing Out) - The leverage of scarcity

"Only 3 items left in stock!"

FOMO is the fear of missing out on an experience, an opportunity, or a bargain that others are getting. In marketing, this is a powerful weapon to drive immediate action.

Why it works: It triggers our primal social instincts: the fear of being excluded from the group and the desire for social validation. Scarcity (of time or quantity) creates a sense of urgency, causing us to temporarily abandon rational analysis and switch to acting on impulse.

Real-world applications:

• Countdown timers: "Flash sale ends in 01:23:45."

• Limited stock notifications: "Only 2 rooms left at this price."

• Social proof displays: "15 other people are also viewing this item."

• Exclusive offers: "Only for the first 100 members."

E-commerce platforms like Shopee and Lazada are masters at using FOMO to create "checkout frenzies."

3. The decoy effect, anchoring effect & FOMO: The anchoring effect - The first number always haunts you

Doesn't an item on sale from 1,000,000 VND down to 500,000 VND feel like a much better deal than an item with a list price of 500,000 VND?

That is the Anchoring Effect.

The Anchoring Effect is a cognitive bias that describes the human tendency to rely too heavily on the first piece of information received (the "anchor") when making decisions.

Why it works: The first number creates a reference point in the mind. All subsequent information is compared and adjusted based on that anchor, whether it's logical or not. The 1,000,000 VND number has "anchored" a perception of value in your head, making the 500,000 VND price seem like an unmissable opportunity.

Real-world applications:

• Strikethrough pricing: Displaying the higher, original price next to the reduced price.

• Product/Service pricing: Presenting a "Premium" package at a very high price to make the "Standard" package seem more reasonable.

• In negotiations: The person who makes the first offer often gains an advantage by setting the "anchor" for the entire discussion.

How to "use" instead of "abuse"?

Understanding these psychological effects provides immense power, and with great power comes great responsibility.

• For Brands: The key lies in transparency and ethics. Use these principles to highlight the true value of your product, helping customers make better choices, not to deceive or manipulate them. An effective "decoy" is one that helps customers recognize the superior value of the main package, not one that conceals an unreasonable price.

• For Consumers: The best defense is awareness. The next time you feel an invisible pressure to buy, stop for a second and ask yourself:

  • Do I really need this item, or am I just afraid of missing out?

  • Is this option really the best for my needs, or is it just better than the "decoy" next to it?

  • What is its true value without that original price "anchor"?

Understanding how the mind works not only helps us become better marketers but also smarter consumers. And that is the game where both the brand and the customer win.