ABSTRACT
This chapter shows that buyers sometimes use price as an indicator of quality, assuming that if a product is more expensive, it must be better. It explores a research programme, which examines this phenomenon, and its weaknesses. One line of research on the price/perceived-quality relationship over the past half century has followed this pattern, combining poor scientific method with good experimental technique to produce little of value. Knowledge advances by testing and trying to disprove hypotheses rather than by trying to support them. The alternative to poor testing of a trivial hypothesis should not be the rigorous testing of a trivial hypothesis, but the rigorous testing of an important hypothesis. Even where the price/perceived-quality relationship is of commercial interest, it is not necessary to inflate its importance by treating it as a distinct major research programme. Generally researchers seem to have no deeper or more-clearly-defined aim than to try and find out more about the price/perceived-quality relationship.
