For many people, buying a luxury handbag is not an uncommon purchase: perhaps just as common as buying a blouse at Target Corporation (TGT). While the appeal of luxury goods is undeniable — the leather is soft, the logo is flashy — the price tag can be off-putting. Unless you’ve got a good job with a high salary, or have developed fantastic personal savings habits, buying luxury consumer goods can be cost-prohibitive (or create a credit card balance that isn’t easy to pay off).

Consumers don’t behave rationally all of the time. A perfectly rational person would always act in accordance with reason or logic; in other words, a perfectly rational person would always act in their own best interest (including in their own best financial interest).

However, numerous modern behavioural psychology studies have revealed that humans don’t always act rationally. And many consumers who buy luxury goods are not in a financial position to be able to afford luxury goods. The proof of this may be in the high rates of consumer debt that many Americans have. Depending on how you look at it, this phenomenon may be evidence that many Americans don’t always act in their best financial interest.

While a high-quality, durable handbag can be purchased for around $100, some people opt instead to spend thousands of dollars on a luxury-brand handbag that performs the same function and is of largely the same quality.

In some cases, low self-esteem can be a factor that influences whether or not a consumer purchases luxury goods, especially if they cannot easily afford the cost of luxury items. For some consumers, a luxury good can go a long way in increasing self-esteem or providing a sense of belonging.

A sense of accomplishment is another reason why some people buy luxury goods. They want to reward themselves for their hard work by treating themselves to something they typically could not afford.

Picture this: You' re at a movie theater food stand loading up on snacks. You have a choice of a small, medium or large soda. The small is $3.50 and the large is $5.50. It's a tough decision: the small size may not last you through the whole movie, but $5. 50 for some sugary drink seems ridiculous. But there's a third option, a medium soda for $5.25. Medium may be the perfect amount of soda for you, but the large is only a quarter more. If you're like most people, you end up buying the large（and taking a bathroom break midshow）.

If you're wondering who would buy the medium soda, the answer is almost no one. In fact, there's a good chance the marketing department purposely priced the medium soda as a decoy（诱饵）, making you more likely to buy the large soda rather than the small.

I have written about this peculiarity in human nature before with my friend Dan Ariely, who studied this phenomenon extensively after noticing pricing for subscriptions（订阅）to The Economist. The digital subscription was $59, the print subscription was $125, and the print plus digital subscription was also $125. No one in their right mind would buy the print subscription when you could get digital as well for the same price, so why was it even an option? Ariely ran an experiment and found that when only the two "real" choices were offered, more people chose the less-expensive digital subscription. But the addition of the bad option made people much more likely to choose the more expensive print plus digital option.

Brain scientists call this effect "asymmetric dominance" and it means that people gravitate toward the choice nearest a clearly inferior option. Marketing professors call it the decoy effect, which is certainly easier to remember. Lucky for consumers, almost no one in the business community understands it.

The decoy effect works because of the way our brains assign value when making choices. Value is almost never absolute; rather, we decide an object's value relative to our other choices. If more options are introduced, the value equation changes.

Shopping in Singapore

Surrounded by local and international department stores and big malls on both the ends, Orchard Road is the most famous spot for best shopping in Singapore. From budget clothes and electronics to discount stores for high-end fashion labels and housewares, you can find everything under one roof.

Timings: Most of the stores and markets open from 9 or 10 a.m., and close by 10 p.m. But on every Saturday, almost all the shops extend the shopping hours till 11 p.m.

Known for being the most glorious attraction, the area of Marina Bay is home to a lot of famous malls in Singapore. From local brands to international ones which you may have never heard of, everything can be spotted here at a price you might not have to think about twice.

Timings: While most malls stay open from 10 a.m. to 10 p.m., the shops here stay open till 11 p.m. every day, and till 11:30 p.m. on Friday and Saturday.

This market area is one of the most fascinating and best shopping places in Singapore for those on a budget. It is certainly a great place to buy spices, souvenirs, and clothes. Also, you can heartily bargain here until you feel satisfied with your buy!

Timings: While some stores stay open till 6 p. m., some close late in the night by 11 p. m.

The most colorful and active place for shopping in Singapore, Little India is a paradise for every tourist looking to shop his or her heart out. The easy connectivity of the lanes makes shopping and walking around a cakewalk. From spices and rich sari fabrics to flowers, jewellery, and silverware, you can find anything here!

Timings: While the Mustafa Centre stays open for 24 hours, the other shops mostly remain open till 10 p.m.