$9.99 often feels closer to $9 than $10 because people overweight the leftmost digit when scanning quickly.
A third option can make your target option look like the best value. Example: Small $3, Medium $6, Large $6.50. Medium suddenly seems “wrong,” pushing you to Large.
“Only 2 left” and countdown timers exploit loss aversion and fear of missing out, shifting you from careful evaluation to quick action.
These work best when you’re uncertain about the ‘right’ price—your brain uses cues to simplify the decision.
A cinema changes its menu from: Small $4, Large $7 to: Small $4, Medium $6.75, Large $7. If more people start buying Large, what best explains why the new Medium option increases Large sales?
This is the decoy effect: the Medium is close in price to Large but clearly worse value, so Large looks like a ‘smart’ choice for a tiny extra cost. It’s tempting to think the Medium signals quality differences, but the effect here is about relative value, not premium positioning. The idea that it reduces anchoring is the opposite of what happens—adding options often creates stronger comparisons. And if randomness drove behavior, you’d expect more Small purchases, not more Large.