There’s a fascinating new field of research called behavioral economics that studies how cognitive and psychological factors affect economic decisions.

Here’s an example of how this works on a daily basis.  In a restaurant, you’ll tend to order a $25 steak if there’s a $50 steak on the menu.  A $25 steak alone on the menu would seem too expensive.  This is called the anchoring effect.  The $50 steak anchors your expectations of what a steak should cost.  So you figure you’re getting a deal at $25.  Restaurant “menu engineers”  figured this out a long time ago.  Another secret of menu engineers:   listing less expensive items at the bottom or back of the menu.