Both humans and animals are known to exhibit a violation of rationality known as “decoy effect”: introducing an irrelevant option (a decoy) can influence choices among other (relevant) options. Exactly how and why decoys trigger this effect is not known. It may be an example of fast heuristic decision-making, which is adaptive in natural environments, but may lead to biased choices in certain markets or experiments. We used fMRI and transcranial magnetic stimulation to investigate the neural underpinning of the decoy effect of both sexes. The left ventral striatum was more active when the chosen option dominated the decoy. This is consistent with the hypothesis that the presence of a decoy option influences the valuation of other options, making valuation context-dependent even when choices appear fully rational. Consistent with the idea that control is recruited to prevent heuristics from producing biased choices, the right inferior frontal gyrus, often implicated in inhibiting prepotent responses, connected more strongly with the striatum when subjects successfully overrode the decoy effect and made unbiased choices. This is further supported by our transcranial magnetic stimulation experiment: subjects whose right inferior frontal gyrus was temporarily disrupted made biased choices more often than a control group. Our results suggest that the neural basis of the decoy effect could be the context-dependent activation of the valuation area. But the differential connectivity from the frontal area may indicate how deliberate control monitors and corrects errors and biases in decision-making.