Compromise Effect

The compromise effect, also called extremeness aversion, is the tendency for people choosing among three or more options that vary on the same attributes to disproportionately favor the option in the middle rather than either extreme. The effect is generally explained through loss aversion: a choice at either extreme risks a larger perceived shortfall on whichever attribute it scores worst on, so the middle option minimizes the largest potential regret and feels like the safer choice. The pattern is widely used in pricing, where adding a costlier option can shift buyers toward a particular tier by making it the new middle choice.