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.