I think it works for slightly more expensive things too. Like absent any noticeable difference we would assume that a $5 hotdog was better than a $2 hotdog.
You may be thinking of Veblen goods, which are marked up to such a degree that the high price point is the point of the purchase. It makes the product more exclusive.
But a $5 hotdog is very expensive while a $2 one is just “a normal hotdog in an expensive place”. It’s the jump from the “normal” price. 2x is expensive. 10x is “exclusive”.
But I think it has to go way up. If it goes up but not enough then it’s an expensive thing, not a valuable one.
I think it works for slightly more expensive things too. Like absent any noticeable difference we would assume that a $5 hotdog was better than a $2 hotdog.
You may be thinking of Veblen goods, which are marked up to such a degree that the high price point is the point of the purchase. It makes the product more exclusive.
But a $5 hotdog is very expensive while a $2 one is just “a normal hotdog in an expensive place”. It’s the jump from the “normal” price. 2x is expensive. 10x is “exclusive”.
Yeah you can play with the numbers, and it all depends on the economic context.