Decoy effect
Also known as Asymmetric dominance effect
The tendency for our choice between two options to change when a third, clearly inferior option is added. The added option makes one of the original two look better by comparison.
Some later studies found the effect often disappears when options are shown as pictures or tried in person instead of described with numbers, so its real-world size is debated.
In everyday life
A cinema sells small popcorn for $4 and large for $8, then adds a medium for $7.50, and suddenly most people buy the large.
You were going to buy the cheaper of two blenders until the store placed a third one beside the pricier model, costing almost as much but with fewer features, and now the pricier one looks like a steal.
Why your mind does this
Keeping our freedom to choose and our standing in a group protects us from being exploited or pushed out. Sticking with what already works, and avoiding choices we can't undo, limits the damage of a bad call. These habits likely helped people get by in small groups, where losing status or making a costly mistake could be serious.
How to spot it
Ask whether you would still choose the same option if the least attractive choice on the menu disappeared.
How to counter it
Remove any option you would never pick, then compare the remaining ones directly.