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Beyond the decoy effect

Published: 20 Apr. 2016, 20:08

If you always have to choose between noodle soup and noodles with brown sauce, you would soon get tired of both no matter how hungry you are. You would be tempted to try cold noodles or fried rice instead. It may be how voters felt towards the People’s Party for the general election. In the political structure that has been dominated by the Saenuri Party and the Minjoo Party, a new party has entered the game. Curious voters — especially the young ones — cast their votes, crushing the ruling Saenuri Party. The People’s Party was the bait to raise the attention and turnout of the election. It is like a new model in the mobile phone or electronics market which would boost overall sales.

The role of the bait does not stop here. It often serves as the standard of existing products. The overwhelming victory of the Minjoo Party was helped by the decoy of the People’s Party. Voters were interested in the People’s Party store, which did not have the right products or competitive candidates. So they reserved a spot for proportional representation and browsed the next store, the Minjoo Party, and voted for their candidates. The Saenuri Party’s store, whose owner is so arrogant and involved in an internal fight, drove away voters.

It is called the decoy effect in marketing. An attractive decoy can expand the market by drawing customers and help them distinguish which is better. Let’s say there is a 10,000 won ($8.80) set of 10 units and a 20,000 won set of thirty units. Customers are in dilemma. They would spend less money by buying the 10,000 won set, while each unit in the 20,000 won set is much cheaper. While it seems reasonable to pick the 20,000 won set, it is not always the case. Many consumers choose the 10,000 won set considering the size and what they can afford. Some would not buy at all.

Here, let’s add a new product — a 20,000 won set of 20 units — and then the situation changes. The new product is no better than the 10,000 won set, as it gives twice more units for twice the price. But it highlights how economical the existing 20,000 won set is.

Consumers become newly interested in the old set, and the sales go up. Consumers who compared A with B now compare A with C and B with C. The new product becomes the standard to judge the existing products.

The decoy effect of the People’s Party in the general election is likely to continue through to the 20th National Assembly. The big opposition-small ruling party structure has been established, with three major parties. The position of the People’s Party will often be the standard to accentuate the difference between the Saenuri Party and the Minjoo Party and help the people distinguish which is better.

People are already paying attention to what the People’s Party has to say on the Sewol Ferry incident, labor reform and the state-authored history textbook. The People’s Party could take advantage by siding with the Saenuri Party on job creation and with the Minjoo Party for economic democratization. However, there will be no future for the People’s Party if it is satisfied with the role of a mediator between two big parties.

There are downsides to the decoy effect. If it is used as the standard to compare existing products, it will be a bait forever. But it could be the mainstream if it can overwhelm existing products in price and performance.

After the election, Ahn Cheol-soo said that the People’s Party would be more than a casting voter but a party that leads policies. I hope he aspires to be mainstream, not a decoy. Then, he should not offer a half-half combo menu to the citizens who are tired of the noodle soup and the noodle with brown sauce. He should propose a completely new menu. He needs to present a national agenda and economic strategy to differentiate itself from the Saenuri and the Minjoo Party. The People’s Party should deviate from the pleasant role of a decoy and walk the rough path. The future of Korean politics depends on Ahn Cheol-soo and the People’s Party.

JoongAng Ilbo, Apr. 20, Page 30

*The author is an editorial writer of the JoongAng Ilbo.

Na Hyun-chul