It all has to do with a psychological principle called anchoring. Essentially, the first number you see colors any numbers that come after it.
Imagine: You see the perfect pair of jeans for $200, and it seems a bit steep. Later, you go online and find that same pair for $150 - $50 less! "What a great deal," you think to yourself.
But is it?
It's no secret that most products, including designer jeans, are produced for much less than they're sold. So when you're basking in the glow of saving $50, you're still spending $150 … you're just much happier about it than you would have been had you seen the same pair of jeans for $100 first. ("$150? What a ripoff!")
The anchoring effect isn't limited to pricing. It's a cognitive bias also used in professional negotiations, where the first person to throw out a number has the advantage, because they provided the figure that will affect any others to follow.
How can you combat this subconscious influence? By creating your own anchor. For example, if you're going shopping in person, set a mental limit for how much you'd be willing to pay for that must-have denim, and then check the tag. If it's more than your limit, you're out of luck (and you'll probably be horrified at the price). If it's less, you can sweep it into your shopping cart with a clear conscience, knowing your budget will thank you later.
Unfortunately, creating your own anchor isn't a magic fix: If your mental anchors and existing prices don't match up, you may want to make a point of doing your research. Once you've seen a dozen or so similar products, you'll have an idea of the best prices available.