Ratio-difference principle
The same gap feels bigger between small numbers than between large ones.
What it means
The principle that a given absolute difference between two quantities is perceived as larger, and weighed more heavily, when the quantities are small than when they are large — because the mind responds to the ratio between values rather than their raw difference. Rooted in the psychophysics of perception (where sensitivity to a change scales with the baseline magnitude), it implies that the difference between $10 and $20 looms larger than the identical $10 gap between $1,010 and $1,020. The principle underlies diminishing sensitivity in prospect theory and rationalizes otherwise inconsistent behavior, such as driving across town to save $10 on a cheap item but not on an expensive one. It is a close relative of the Weber–Fechner law applied to value and money. It matters for pricing, discounting, and mental accounting, where whether a saving feels worthwhile depends on the size of the total it is measured against.
Examples
Shoppers will make a special trip to save $5 on a $15 item but not to save the same $5 on a $125 item, because the proportional difference is what registers.
Haggling for twenty minutes over £200 off a £600 sofa, then waving through a £200 upgrade on a £30,000 car — the same £200, measured against very different totals.
A £2 rise in the price of a coffee provokes outrage; the same £2 added to a £400 flight passes unnoticed, because what registers is the proportion, not the pounds.
First described in Tversky & Kahneman (1981).