A Psychological strategy used to influence decision of a person.
Basically to downplay one product of yours (by value, price, benefits, etc.) such that other product looks like a lucrative deal

Let's take a live example

Have a look how pricing is placed at Zoom

What do we see ?
One is a free plan but have 40 mins of limitation while other is paid Plan but doesn't have any limit.

The average corporate employee spends about 2 to 2.5 hours per day in meetings. (source: google)

Obviously the free tier won't work when your company size is in growth stage. It works until it works and you are small team which don't need much calls. Now look which plan is particularly highlighted with blue border and with Most Popular tag.

There is one more example. Looking at pricing of hubspot, we can see the drastic pricing difference among free, started & professional plan.

If you are in growth stage (2+ people) what will you choose?
Starter or Professional?

Obvious answers seems to be Starter. Analyse the price cliff hubspot has added to make both the other plans less sexy compare to Starter pack.

Free - doesn't have more seats and features
Professional - Is roughly 100x of the Starter's price.

We choose to go with starter as we don't have much option