"The Illusion of Choice"
Full disclaimer: Not one of my theories. This was told by one of my professors and I found it interesting enough to share.
If you were provided with the following subscription options for a magazine, what would you choose?
Option 1: Online only - $49.99/year
Option 2: Print only - $69.99/year
Option 3: Print + online - $69.99/year
If your reaction was "wait, why is option 2 present at all? No one in their right mind would choose 'print only' when they could get print AND online for the same price! ", read on.
Option 2 is provided only to give you the illusion of choice. Option 2 makes option 3 "look good".
If you were looking to purchase only the online version (for $49.99), you might be tempted by "what a good deal" the combo is. Think about it again--if you were offered only choices 1 and 3, would you have spent time thinking about option 3? Probably not.
With option 2 being offered, would you give more consideration to option 3 than if option 2 was not offered? I would!
The reality is that the online version doesn't cost them very much, and they can afford to provide this service for "free", when the end result is that they've got $20 more from you than you intended to give them.
Even if a small percentage of people who intended to spend $49.99 end up spending $69.99 instead, this has worked out very well for them, at little to no cost!
The same principle is at play at the fast food joints where they offer "combos" of burgers, fries and coke. I go there for a burger, not intending to buy a coke, but I take the combo because I get a "good deal", ultimately spending several dollars more than I intended to.
It's freakin' brilliant.
