Whats the psychology behind this
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There’s a whole field of study around some of the seemingly illogical choices humans make called behavioral economics. If you’re interested in this subject, look up Daniel Kahneman, Amos Tversky, and Richard Thaler.
I think a simple explanation is that there is a TON of information being thrown at us all the time. Our brains, like computers, can only handle so much. So we create “shortcuts”. Most of the time, these shortcuts work just fine – hence the reason they exists. But sometimes they cause humans to do weird things
With your example, there’s what caused the “anchoring effect”. Essentially, the price that we’re told something should be sold for is what we label as the default. So telling someone that something should cost $100 but they can get it for $75 can make it feel like they are getting a “good deal” even though none of that should really matters. What should matter is whether or not you think it is worth $75, not how much of a “deal” you got.
Look up the recent history of JC Penny. They are notorious for everything being on “sale”. A while back, a new CEO tried to get away from this and just price items properly. And their customers hated it. It turns out, many people want to pay $75 for a product that is normally priced at $100 than they do for that exact same product that is simply priced at $75.
People are weird. In our defense though, our brains would probably freeze up if we tried to process every bit of information and try to come to logical answers for everything. Our brains essentially exists for one reason – keeps us alive so we can reproduce. Anything beyond that is just a kind of nice thing to have.
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