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Pricing Biases in Behavioral Economics

In behavioral economics, the "price effect" (or pricing bias) describes how an arbitrary price label distorts perceived value and quality independent of a good's actual attributes: people rate, and neurologically respond to, identical goods as more enjoyable or effective when told the price is higher. This reflects a broader cognitive bias in which price is confused with intrinsic value, biasing both subjective preference judgments and objective performance outcomes.