The Economist magazine once offered three subscription packages: an online one for $59; a print one for $125; and a combined print and online subscription also for $125.

The ad caught the eye of a professor, who asked 100 of his students which subscription they would choose. Eighty-four chose the combo and 16 chose the online only. No one chose the print only subscription.

But when the print-only option was eliminated and students were just given a choice between the $59 online subscription and the $125 combined one, 68 chose the cheaper option.

The print-only subscription doesn't have a lot of value as a package. But it influences the way customers make snap judgments.

These "decoy" packages make other-often more expensive-ones look good by providing a clearly inferior choice. There's no obvious way to determine whether the online subscription or print-and-online combination is a better value. But compared with the print-only one, the combo is clearly a better deal. The reference point makes people more inclined to pick it.

Similarly, a company may use a decoy to make an expensive product look affordable. A common tactic is enterprise software that costs, say, $500 a month for up to 10 users, $1,000 a month for up to 25 users but just $1,200 for unlimited users.