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Is there a name for the logical fallacy that more expensive goods must be better than less expensive alternatives? Often times people make this assumption without looking at the actual design or quality.

First example: High-octane gas. Some people mistakenly think the more expensive gas is better quality. But really the higher octane's primary purpose is to allow the gas to compress more without exploding, as you need in certain high-compression engines.

Second: Audio/video cables. People (audiophiles) spend a ton of money on Monster cables and other "premium" A/V products. Sometimes there is a notable difference but so often their money is wasted on extra copper or shielding that really has no effect on signal quality.

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    I don't think this can be reduced to a simple logical fallacy, or at least, doing so wouldn't do this justice. Pricing is a very complex field, tied very closely to human psychology, and with many factors in play. The "more expensive must be better" assertion doesn't really come out of nowhere on its own, it's more of a quick summary of a much more complicated effect. For example, here's some interesting psychological aspects in pricing. Your question may actually be more appropriate in a slightly different form on CogSci or Economics. – Jason C Dec 22 '15 at 21:06
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    The reason something is expensive is usually because many people want it (if there's a finite supply, the price inevitably goes up). So maybe it's argumentum ad populum (aka the bandwagon fallacy). – FumbleFingers Dec 22 '15 at 21:09
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    It is not a logical fallacy. It is an opinion/belief/hypothesis. What is red is good and alligators are plants are not arguments, and are not fallacious. – Drew Dec 23 '15 at 2:53
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    From the other side, it is a marketing concept called "prestige pricing". In other words, a product might have its price increased for the purpose of making it seem better. – Todd Wilcox Dec 23 '15 at 3:18
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    Not an answer, but there's a concept of a "price placebo", where expensive medications have a stronger placebo effect than cheap medications. – Andrew Grimm Dec 23 '15 at 22:02
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The name of the fallacy is appeal to wealth or argumentum ad crumenam.

An appeal to wealth (argumentum ad crumenam) occurs when more money involved means something is truer or better, exploiting the impression that money flows from intelligence or work.

Source: http://rationalwiki.org/wiki/Appeal_to_money

  • Strictly speaking, simply putting a price tag on something does not "involve" any money at all. There would have to be actual buyers for money to enter the picture. And I'm not sure that is assumed in the question. – Jeff Y Dec 24 '15 at 11:30
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You say "fallacy", I say "heuristic". The "common law of business balance", sometimes expressed using the aphorism "you get what you pay for", expresses a correlation between the price of a good and its quality. When a buyer has no other evidence of a product's quality, the buyer is likely to assume that the seller of the less expensive product cut corners that negatively affect its quality in some material way. So the user is applying a quality heuristic.

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This could be a "Giffen good" in economic theory, named after economist Robert Giffen.

"a product that people consume more of as the price rises and vice versa—violating the law of demand. "

Or a "Veblen good" named after economist Thorstein Veblen.

" Veblen goods are types of luxury goods, such as expensive wines, jewelry, fashion-designer handbags, and luxury cars, which are in demand because of the high prices asked for them. "

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    Giffen goods are commonly cheap/mandatory products like bread, rice, etc, probably not something that applies to this case – SztupY Dec 23 '15 at 15:20
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I would definitely categorize it as an example of the Hasty Generalization fallacy. https://en.wikipedia.org/wiki/Hasty_generalization

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If an object is considered more valuable by its owner merely because its high price prevents less-affluent people from owning it, then you could call this attitude the snob effect.

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There is such a thing as chronological snobbery:

The erroneous argument that the thinking, art, or science of an earlier time is inherently inferior to that of the present, simply by virtue of its temporal priority.

By analogy, one can call this price snobbery or, perhaps, just snobbery.

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If the argument for the expensive good is made after the purchase, Post Purchase Rationalization is an appropriate name.

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