http://www.ted.com/talks/dan_ariely_asks_are_we_in_control_o...
Look around 11:30 for a few examples of how comparing options affects us more than looking at each individually.
On a side note, it also seems inexpensive because it's $499 and not $500! Psychological pricing is one of my larger pet peeves...
Ditto. That's why I round up when somebody asks me how much something costs. The mathematical error resulting from using $500 instead of $499 is much less than the psychological error induced by the smaller first digit.
Sales: So it looks like the $299 point-and-shoot might match the features you're looking for, moreso than this $399 video camera.
Me: OK. I'm really leaning towards the $300 one.
Sales: $299.
Me: Yeah, sure. Because I don't know if I'm really going to get my money's worth, paying an extra hundred for the $400 one.
Sales: $399.
Me: (uppercuts salesperson into the stratosphere)
While I'm on the subject, here's a fun fact: a chocolate-peanut-butter flavoured milkshake from Cold Stone, in their largest size, contains over two thousand calories.
Sounds like a great way for a highly active person to put on weight.