Contrast Misreaction
We judge relative to recent comparisons, not absolute standards.
Key Principle
Evaluate options independently, not sequentially.
Understanding Contrast Misreaction
Contrast effect causes us to judge things relative to what we've just experienced rather than on their absolute merits. A $100 item seems cheap after looking at $500 items. A mediocre candidate seems good after several poor ones.
Real estate agents use this by showing terrible houses first to make mediocre houses seem good. Car dealers discuss expensive add-ons after the big purchase is made, when $500 seems trivial compared to $40,000.
The danger is that our evaluation of almost anything depends on what we've just been exposed to, which is often arbitrary or manipulated.
Real-World Examples
- Real estate agents showing bad properties before the one they want to sell.
- Salary negotiations anchored by a low initial offer.
- Product pricing strategies using decoy options.
- Feeling grateful for a mediocre situation after imagining worse ones.
How to Apply This
Evaluate each option against your criteria, not against other options
Be aware of what you've just been exposed to before judging
Set absolute thresholds before comparing options
Use the contrast effect ethically in your own presentations
Common Mistakes to Avoid
- Accepting something bad because it's better than something terrible
- Paying too much because it's less than an inflated anchor
- Judging performance relative to recent results rather than absolute standards
- Falling for decoy pricing strategies
Notable Quotes
"A small leak will sink a great ship."
— Benjamin Franklin