The Theory of Relativity

Last night, I began reading this book called Predictable Irrationality by Dan Ariely. The subtitle reads, "The Hidden Forces That Shape Our Decisions."
Using research, observations, and an interesting view of looking at the world, Ariely has uncovered several insights into what makes humans tick - that is, why we do things the way that we do, from choosing a romantic partner to buying products that are advertised to us. As one might guess, he finds that people overall make decisions irrationally, though they may not know it. However, not only do we make those decisions irrationally, but we also make them in a predictable pattern as such.
The first chapter of his book deals with decision making in the context of relative objects. He asserts that people are more likely to buy a product if they have something similar yet inferior to compare it to. For example, say you're deciding between taking a trip to Rome or Paris, but your travel agent gives you these three options:

Rome for 7 days with free breakfast included
Rome for 7 days with no free breakfast
Paris for 7 days with free breakfast included

Which one are you more likely to pick? Ariely states that most people, as seen from his findings in this experiement, would pick the Rome including the free breakfast. In this case, then, and most similar cases, the travel agent uses the Rome with no breakfast as a decoy option to get you to pick Rome, because Rome with free breakfast looks better by comparison. Since Paris is a completely different object, it doesn't fit into the comparison sphere and you'd almost automaticaly push it to the sidelines.
So the long and short of this story is: most of the time, people fall for decoys. If you want to introduce a new product to the market, introduce that, along with a similar but more expensive one. Though people may not buy the more expensive one, your product will start to sell because they'll have something else to compare it to. People don't like making decisions (especially purchasing decisions) in a vacuum. Give them something to think about and they may play right into your hands.

I can't wait to see what else this book has in store.