This is an example of a decision context effect, where the introduction of a third option (which doesn't get chosen) causes a change in preference between the original two options. Our paper shows that this context effect, and two others, occur not only in consumer decisions but also in simple perceptual decisions (about the size of rectangles) and so tell us something fundamental about most, if not all, human decision processes.
This work arose out of a visit to the Newcastle Cognition Laboratory in 2012 by Jennifer Trueblood, a graduate student at Indiana, now faculty at UC Irvine. We presently are revising a paper that has been invited for resubmission at Psychological Review, describing a new theory of these effects, the MLBA model, hopefully something we can describe in more detail in a future post!
For more information, please see the following journal artcile:
Trueblood, J., Brown, S., Heathcote, A., & Busemeyer, J. (2013). Not Just for Consumers: Context Effects Are Fundamental to Decision Making Psychological Science, 24 (6), 901-908 DOI: 10.1177/0956797612464241
or email Andrew.Heathcote@newcastle.edu.au