The thinking goes something like this: if you buy this flotation device online, it costs you about 15 bucks. And you may or may not think it’s worth $15 to have one of these.
But the simple fact of the matter is that if you were drowning in choppy waters and a guy on a helicopter above held one of these bad boys out and asked how much you’d be willing to pay for it, you’d probably say “I’ll give you everything I have!” It’s a textbook case of how value can depend on context. If you’re desperate, you’re willing to pay more for something because without it, the outcome is going to be disastrous.
This speaks to how buyers see value. But there are factors that affect how sellers price things as well. Go back to the drowning man. If, in our example, it’s an average Joe with an average job and an average life, then “as much as it takes” will necessarily top out at a certain number. He can give everything he has but it will be a heck of a lot less than if the drowning man is Bill Gates, Roman Abramovich or Sheikh Mansour.