Most Expensive Holiday Gifts: Tiffany Majestic Necklace

A stratospherically priced item can influence the perceived value of the merchandise surrounding it, says Dan Ariely, a professor of psychology and behavioral economics at Duke University and author of Predictably Irrational: The Hidden Forces That Shape Our Decisions. The retailer’s goal, Ariely says, “is to reframe what we think is a reasonable price. If we don’t know what something is worth, we compare its relative value to other things like it” — which is how a $2,000 bottle on a wine list can make the $200 choice seem like a bargain. Fantasy merchandise also appeals to our inner snob. “You get the sense that this catalog is being sent to lots of wealthy people,” Ariely says, “and you think of yourself in that world.” If you can’t swing the diamond necklace on the cover of the Tiffany jewelry catalog, you can still get into the club with the $175 sterling silver necklace on page 21.

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