The $14,000 Bag: How Luxury Brands Manipulate 'Price Perception'

Wall Street Journal:

We've all been there: A window display or a recommendation lures us into a store -- and we face unexpectedly astronomical price tags. It seems to happen more often these days as many luxury brands -- selling everything from $14,000 Ralph Lauren handbags to $899 Bugaboo baby strollers and $6,900 Beefeater barbecue grills -- push their top price points higher than they've ever gone before. What's priced below falls into that ever-expanding category: "affordable luxury."

Some people cut and run when confronted with prices that seem crazy. But many of us experience a sudden emotional-mathematical transformation. We set a new ceiling for a "reasonable" price. Disinclined to go all the way to buy the trophy, we instead settle for a consolation prize. Mr. Schwarz, a jeans-wearing type, walked out of Boyds with a suit that cost merely $800 -- the most he'd ever spent on an item of clothing.

Read the whole story: Wall Street Journal