There's a lot of interesting psychology in pricing. There was a case study (don't remember the link/source, I think it may have been in a TED Talk) a while back

There's a lot of interesting psychology in pricing. There was a case study (don't remember the link/source, I think it may have been in a TED Talk) a while back about how the existence of an option that people would be dumb to select can dramatically influence the outcome of the two options that make sense. Paraphrased example: There was a newspaper selling three packages: Newspaper only - $40 Online only - $60 Online and newspaper - $60 There is no intelligent reason to select the "Online only" option, as for the exact same price you could get the print version as well. However, when this professor did two polls in several of his (large lecture) classes. One group was given the three options, another group was given just two options, print or online. The group given three options, predictably, had 0% selecting online only, with (these numbers are from memory) 70% selecting both, and 30% selecting newspaper only. The group that was given just the two options ended up dramatically preferring the cheaper option with the numbers essentially reversed, 30% choosing online and newspaper. (I looked for the talk to confirm the numbers but couldn't find it - I'd love if someone could point it out and get the correct numbers). The idea was basically that you could have a throw-away option that actually GAVE MORE (perceived) VALUE and TOOK AWAY VALUE to other options. This situation may not entirely apply to this example, but I wonder if what's going on is basically: Trying to increase the perceived value of the more expensive product by having a cheaper product right there, even though he acknowledges there is no additional value.