Clinton, Obama, and the decoy effect!

April 10, 2008 BY danariely

Clinton recently suggested that if she wins the Democratic primaries, she would select Obama as her vice president. Was this a good move on her part? How should Obama have reacted to this?

The field of behavioral economics has shown a phenomenon called the asymmetric dominance effect (or the decoy effect). The basic idea is that when we are presented with two options that are rather different, we have a hard time making a choice between them. In such cases, if a third alternative that is similar to one option but clearly inferior to it is added to the mix it can change the choices we make. It sounds odd that adding an inferior option that no one would select would influence our choices, but it does.

For example, if you had to choose between a weekend in Rome with all expenses paid and a weekend in Paris with all expenses paid, the decision is difficult because the options are different in so many ways (food, culture, atmosphere). But what would happen if we added a decoy option? What if we added a weekend in Rome with almost all expenses paid? This would be the same as the other trip to Rome but without the espresso in the morning. The idea is that Rome without the espresso would make Rome with espresso look better in comparison to Rome without the espresso and also overall and relative to Paris. This is why adding Rome without the espresso can get a larger market share for Rome

In my mind, Clinton and Obama are in many ways like Paris and Rome. Some people might have strong preferences but they are different options with very different advantages and disadvantages.

When Clinton introduced the Clinton + Obama option, she in fact introduced a Rome + espresso option and by doing this I suspect that she did two things. She made the option of choosing Clinton + Obama look good not just in relation to the Clinton only option but overall and compared to the Obama only option. At the same time, I suspect that she also made the Clinton only option look inferior in comparison. Not only to the Clinton + Obama option but also relative to the Obama option.

Now what should Obama have done? If he had presented a counteroffer in which he announced that he would accept Clinton as his vice president, he would have affected the same structure around his own candidacy and as a result, would have muted the decoy effect on the Clinton side.

Alternatively, he could have strongly declared that he would never accept the vice presidency and eliminated the viability of the Clinton + Obama option altogether, leaving Clinton with only the negative effect of suggesting this joint ticket in the first place.

From this perspective, the worst option is for Obama is not react to Clinton’s offer and keep it viable in people’s minds.


Dan Ariely and Jeff Stibel