Which of the offers in the visual below is the better value? Which would you be more likely to buy? It's NOT a trick question. I know, it looks like they're the same, but you--and most everyone else--would find A the better value and be more likely to buy it. The reason may surprise you.
People prefer A is because the physical size differences between the regular and sale price are congruent with their value relationship. In example A the sale price is lower than the regular price AND it is also physically smaller. Judgments on two dimensions reinforce the notion that the sale price is tinier than the regular price.
In example B the sale price is numerically lower, but physically larger. The size to value relationship is in-congruent and that perceptual disagreement makes it harder for people's brain to declare one better than the other. "It's smaller, but it is also larger!"
"Yes, but wouldn't you want the sale price lower so it's more noticable than the higher price," you ask? Not necessarily. That question is related to salience--whether or not people notice the offer--and not to how they perceive its value. There are other ways to achieve salience without compromising people's value perception.
Suppose the product in question is a rack of shirts. I might place a large, orange "SALE" sign atop the rack to achieve salience, but place a price tag on each shirt that resembled example A to created the optimal value perception. This approach would attract people's attention to the rack while maximizing their perceived value and likelihood to purchase once they began looking at the product.
You can read more about this effect in a paper titled: Size Does Matter: The Effects of Magnitude Representation Congruency on Price Perceptions and Purchase Likelihood.
Spread the fire! GS