This is neuroeducation and the price illusion in action — two strange money puzzles, people wanting things more when they cost more, and buying more of something even as it gets pricier, that aren’t really about money at all.
They’re about how the brain handles reward and stress. That makes them great tools for teaching value, creativity, and choices.
Introduction
Educators are always looking for ideas that connect.
Most lessons on value or decision-making stay stuck in theory, so students forget them fast. But these two puzzles connect straight to feelings everyone already knows — wanting status, or feeling stressed about money.
That link between a real feeling and an abstract idea is exactly what neuroeducation is built on. It’s why these two odd economic patterns make such a good teaching tool — the price illusion is really a lesson in how the brain learns to value things.
The mug that shouldn’t sell
Two potters, same craft fair. One sells mugs for $10. The other sells almost the same mugs for $100. The $100 ones sell out first.
That’s not luck. It’s not better craft, either — the mugs look almost the same. It’s your brain doing something odd with price.
Cost and value feel like the same thing to your brain
This is the Veblen Effect (Veblen, 1899): some things feel more wanted as they cost more. A $2M painting isn’t just paint on canvas — the price is part of what you’re buying. Drop it to $100, and it loses its value.
Brain scans back this up. In one study, people drank the same wine labelled with different prices. The pricier label felt more pleasant, and reward areas of the brain lit up more too (Plassmann et al., 2008). Your brain isn’t tracking cost. It’s tracking status.
Celebrity memorabilia make this obvious. A plain jacket is worth little. The same jacket, once worn by Elvis Presley or Michael Jackson, can sell for hundreds of thousands at auction. The fabric didn’t change — the story did, and the price carries that story.
People don’t judge price with cold logic. They judge it the same way they judge status and belonging.
Stress flips the pattern
Now the strange twin: Giffen’s Paradox (Marshall, 1895). In Ireland during a famine, bread got more expensive — and poor families bought more of it, not less. Meat was no longer an option, and bread was still the cheapest way to survive. Price up, demand up.
This isn’t status. It’s stress. Researchers call it a scarcity mindset (Mullainathan & Shafir, 2013).
One study found that thinking about money problems lowered performance on thinking tasks — but only for people actually short on money (Mani et al., 2013). Under real financial stress, the brain shifts from careful thinking to fast, fear-based thinking. Comparing options costs energy people don’t have to spare, so they stick with what they know, even at a higher price.
Kodak film shows a creative-world version of this. Most of Kodak’s film stocks are discontinued or close to it, and what’s left keeps getting pricier. Filmmakers keep buying it anyway, because digital still can’t fully match real film’s grain and color. No true substitute exists, so demand holds even as price climbs — a quiet echo of the bread example.
The brain treats the last of something you truly need as a threat, and threats push people to act fast and pay more rather than risk losing access for good.
The same logic explains a regular who keeps shopping at a small store raising its prices — losing it feels worse than paying more.
Why does this matter for teaching?
Most people learn these as odd facts about markets. Neuroeducation flips that around. Instead of memorizing rules, ask people to notice their own brain doing this:
- Something you wanted because it cost more — that’s your brain chasing status.
- A time stress made you stick with a pricier, familiar choice — that’s your brain avoiding risk, not bad math.
When you connect an idea to something someone has felt, it connects.
That’s the heart of neuroeducation: ideas land better when they’re tied to real feelings, not just facts.
Conclusion
Price is a signal. Your brain reads it two ways: as reward or as threat. This is neuroeducation and the price illusion working together: the Veblen effect and Giffen’s Paradox aren’t weird market glitches. They’re your brain doing its normal job, just in two different moods: feeling proud, or feeling scared.
Next time you want something more just because it costs more — or stick with something familiar even as it gets pricier — that’s not silly. That’s just your brain, working the way it always does.
