Decoy effect
Etymology
Technically the "asymmetric dominance effect," identified by Joel Huber, John Payne, and Christopher Puto in 1982. Decoy borrows the hunting term for a lure meant to draw prey. The famous case is a magazine offering print-only and print-plus-web at the same price, so the pointless print-only option flatters the bundle.
noun · /DEE-koy ih-FEKT/
The way adding a deliberately inferior third option makes one of the original two suddenly look like the smart buy.
What it names
How a choice you’d never pick can still steer you — its only job is to make the option beside it look like a bargain.
Example
The decoy effect is why the medium popcorn exists — priced just under the large, it makes the large feel like a steal.
Related idea
Anchoring effect pulls you toward a reference number; the decoy effect works by relative comparison between options, not a single anchor.