The contrast effect is a phenomenon where people perceive greater or lesser differences than are actually present as a result of prior or simultaneous exposure to something with similar base characteristics, but different key qualities. In a simple example of how the contrast effect works with vision, a researcher can present a subject with a dark square and a light square, each enclosing a smaller square. Even if the smaller squares are actually the same color, the contrast effect will lead the viewer to think the square against the dark background is lighter than the one against the light background.
Visual perception is not the only thing the contrast effect can skew. This can also occur with human cognition, in an example of a cognitive bias. A teaching assistant might grade a mediocre essay more harshly after reading a very good writing sample, for example. People can utilize this effect in sales. A coffin salesperson can show people the same medium-range coffin in the midst of low-end products and high-end products, and they will perceive it differently depending on the surrounding comparison samples. This may encourage people to spend more than they would otherwise.
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In the positive contrast effect, people will perceive something as better than it is as a result of exposure to a worse comparison sample, while in the negative version, people will think something is worse because they have a better comparison sample. This cognitive bias is extremely difficult to overcome, as it is naturally engrained in the brain and the way people think about and perceive the world around them.
Awareness of the contrast effect can lead people to try and take steps to compensate for it. In grading, for instance, people have a rubric they can use to create a more objective standard, and a teaching assistant may take a random sample of papers with various grades and ask another assistant to look them over and make sure the grades are fair. Concerns about visual contrast are especially important with signs and graphic design, where colors can appear abnormal depending on their surroundings and how people handle them.
Like other cognitive biases, the contrast effect can explain some seemingly contradictory human behaviors, and it is an important part of human psychology. People may engage in activities against their own best interests as a result of these biases, and could also do things that seem out of character, like spending more on a purchase than originally planned because of clever sales tactics exploiting known psychological vulnerabilities.