Brick and mortar retailer JCPenney was well known for its weekly sales, in which certain clothes, shoes, jewelry, and home goods would be heavily advertised at discount prices. In 2012, struggling to compete against Internet retailers, then JCPenney CEO Ron Johnson announced that there would be no more weekly sales—instead, all prices would be permanently reduced and JCPenney would trumpet their “everyday low prices.”

JCPenney’s experiment was a colossal failure; its sales plummeted. Within a year, Johnson was fired, and JCPenney was once again marking up prices on its products, so the store could immediately mark them down for the appearance of a discount. Explain the behavioral anomaly that JCPenney exploits when it does this.