Work

Which rubber duck makes the best decoy? Considering the decoy effect on the basis of different behavioral theories

Year: 2026

Type: article

Abstract: Empirical evidence has established the existence of a phenomenon known as the decoy effect, which suggests that including irrelevant alternatives into a choice-set may affect the way in which the original alternatives are evaluated. In this paper we explore different ways to characterize the decoy effect and offer an in-depth discussion on the theoretical and empirical implications of the different modeling approaches. We also consider a stated preference experiment for which we model the phenomenon according to the assumptions of regret theory, emergent value, and prospect theory. Based on theoretical and empirical considerations, our results suggest that models based on prospect theory seem to outperform alternative behavioral paradigms to model the decoy effect. • This study examines different modelling approached to consider the decoy effect from theoretical and empirical perspectives. • This study considers different specifications based on random regret, emergent value, and prospect theory models. • This study finds support for relying on prospect theory models to consider the decoy effect.

Source: Journal of Choice Modelling

DOI: 10.1016/j.jocm.2025.100585

Authors: Francisco Bahamonde-Birke, C. Angelo Guevara

Institutions: Utrecht University, Tilburg University, Complex Engineering System Institute, University of Chile

Language: English

Topic: Decision-Making and Behavioral Economics

Subfield: General Decision Sciences

Field: Decision Sciences

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $3,090

Funders: Agencia Nacional de Investigación y Desarrollo, Fondo Nacional de Desarrollo Científico y Tecnológico