The less-is-better effect is a cognitive bias where people prefer a lesser option when evaluated separately, but choose the superior option when both are seen together. This phenomenon was first noted by Christopher Hsee, highlighting how perceptions can change based on the context of decision-making, particularly how items are presented. The effect suggests that individuals often make evaluations based on simpler, easily comparable attributes instead of more significant ones.
In a study, participants preferred a $45 scarf over a $55 coat when evaluated separately, as they perceived the scarf-giver to be more generous. However, when both options were presented together, they recognized the higher value of the coat.
To counter this bias, always compare options side by side rather than in isolation to assess their true value.