New York Times digital access – the decoy effect

In case you haven’t noticed, the New York Times new digital and home delivery offerings set up a version of the classic decoy effect. (See Dan Ariely’s famous experiment involving an Economist subscription for background.)

Option A) Online access to all content from NYT.com on computers and smartphones ($15/month) – The Digital Option.

Option B) Home delivery of Sunday New York Times ($30/month – yes, there’s a cheaper teaser price of $15/month but it ends after 12 weeks) – The Print Option.

But the New York Times has decided to offer print subscribers at any level free access to all NYT.com content. So there is now a third option.

Option C) Home delivery of Sunday New York Times plus online access to all content from NYT.com on computers and smartphones ($30/month) – The Print and Digital Option.

Option C dominates Option B. Its purpose is to make Option C look more like a bargain relative to Option A.

And lo and behold, it appears to be doing just that.

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  • Dave Tannenbaum

    I think this post is mistaken. Option B (the dominated option) is actually the “all digital access” bundle, at $35 a month, rather than a “print only” option (which doesn’t exist, since as the post mentions all print subscriptions also automatically receive all access digital subscriptions).

    But this mistake aside, the decoy effect is likely NOT the reason why NYtimes set up the available choices in this manner. It probably has to do with the fact that NYtimes get additional ad revenue from print subscriptions (so much so that they are effectively paying the customer to take a print subscription). Whether the NYtimes want to admit it or not, they have the same business model as the yellow pages.

    • http://www.nudges.org/ Nudge blog

      Agreed, there are plenty of reasons to go to this model. For instance, the Times doesn’t have to pay Apple as much if you sign up for the paper/digital package through them.