Who is the middle plan for?
Training 1325 minutesdecoy effect
Three storage plans cost $8, $18 and $20. The largest looks like a bargain next to the middle one. You need 40 GB.
Training goal: Compare each plan with your actual needs
▶ Play this trainingSituation
1. $8 buys 50 GB, $18 buys 60 GB and $20 buys 200 GB. All required features are identical.
- Choose 50 GB for $8
- Choose 200 GB for only $2 more than the middle plan
- Take the middle plan as a safe compromise
2. A project adds 45 GB. You need 85 GB for one month, then those files can be deleted.
- Keep the small plan on principle
- Move to 60 GB as a modest upgrade
- Use 200 GB for one month
3. The large plan offers a year at $180 instead of $20 monthly. After the project month, $8 is enough again. Switching has no fee.
- Keep the large monthly plan for the whole year
- One large month, then eleven small months
- Buy the $180 year for the discount
4. The middle plan disappears. The large plan feels less appealing, although small and large prices are unchanged.
- Recheck your required capacity and timing
- Assume the large plan is worse after the redesign
- Find another service just to restore three options
What you will learn
- Better than a neighboring option is not necessarily better for you
- New capacity needs can change the best plan
- Calculate costs over your own usage schedule
Your real-life step
Hide the middle option in your next plan comparison and see whether the urge to choose the costly one changes.
Questions and answers
What is the decoy effect?
An added option can change how attractive other choices seem even when their terms stay the same.
Is the largest plan always unnecessary?
No. It may fit required capacity or features best. Check usefulness rather than its position in the list.
How should I compare annual plans?
Count actual months of need, switching options, fees and upfront payment. An annual discount need not beat a flexible schedule.
More trainings in this module
- It used to cost $900. So what?
- Leave it as it is?
- My phone is worth more
- Everyone is already going
- Does the queue know best?
- Does a bonus count?
Numbers are illustrative. A game, not financial advice.