When High Prices Attract Consumers and Low Prices Repel Them

Price has informational value that equates high price with high quality.

As consumers, we think of high prices as painful and low prices as attractive. However, prices have a powerful informational value that can make this relation invalid. The level of an object’s price embeds and conveys useful information about its quality (or lack thereof) or the quality of the store from which it is purchased.

For instance, if all I te…