Disposed – Breaking Down a Purchase Decision and the Decoy Effect

It started with a toothpick.

You know, the metal kind, used for cocktails and hors d'oeuvres. It sat in the darkness of the Lazy Susan cabinet, confined for most of the year and bypassed for measuring cups, mixing bowls, and corn-on-the-cob dishes.

Not today. This toothpick wanted out.

As water streamed from the bottom of our broken disposal — a life cut short — a sticker told me who to call for service... and $15 off.

The Ultimatum

Interrupting a virtual client meeting, my wife shared the technician's ultimatum: We could buy the 1/2 horsepower disposal with a 3-year warranty for $500 or the 3/4 horsepower disposal with a 10-year warranty for $1,000.

Faced with a decision and no good way to decide, I turned to Google, where I found a wide variety of disposals priced anywhere between $100 and $250.

Apologizing to everyone on Zoom, I clicked Mute, disabled my camera, and walked upstairs to the kitchen.

The Deliberation

"Isaac," I said, "tell me about these two disposals. Are they good quality? What if I only want a 3-year warranty on the 3/4 HP disposal? Why are they so much cheaper at Home Depot?"

The total cost included labor and markup, he shared openly, and my brain's calculator began crunching numbers.

So if we assume the $500 option includes about $350 for labor, and it makes no difference to Isaac which disposal he installs, then the 1/2 HP disposal is $150 and the 3/4 HP is... $650?!

Something smelled fishy, and it wasn't my broken disposal.

"Hey Isaac," I asked, "what if I buy a disposal and you install it?" But my wife's eyes pleaded with me to solve this problem today. "When do you have time to shop for disposals?" she interjected.

She was right. Even if got a full 1 HP disposal installed for the cost of the 1/2 HP disposal, it meant a few more days of hand-washing dishes and a drip bucket under the sink.

In the end, we chose the $500 option, rationalizing that it could break and we could buy other one for the same total outlay.

The Aftermath

A week later, we're still happy. The new disposal is admirably fulfilling its purpose on earth. Isaac was a wonderful technician, sharply dressed by Cintas. Leaving his boots outside on a branded welcome mat was an unexpected and memorable touch.

However, as a lover of behavioral science, I couldn't stop thinking of The Decoy Effect and wondering how the addition of a third, less attractive option (the decoy) would've influenced my perception of the other two choices.

Would our decision be different if the company offered a 3/4 HP disposal with a 5-year warranty for $800? Getting the same power as the $1,000 option is nice, and I can live with a shorter warranty. Adding this option would likely result in more $800 sales and fewer $500 sales.

How about a 1/2 HP disposal with a 10-year warranty for $1,000? This option would probably lead to a few more sales of the 3/4 HP option for $1,000.

How about a second 1/2 HP disposal, but with a 5-year warranty for the same cost of $500? Obviously, we would take the extra two years of warranty coverage. But why would a company offer this? Perhaps the wholesale price is less and they make more profit.

Each of these additional options demonstrates how the plumbing company we chose has the power to adjust two attributes, price and power, and influence purchase decisions. Through testing, they can optimize for maximum profit by simply tossing a third disposal into the van and empowering technicians like Isaac to offer an easier, more satisfying buying experience to his customers.