Most of the time, when we're buying non-commodity items, we're asking ourselves questions like:
-How much pain am I in right now?
-Do I deserve this?
-What will happen to the price in an hour or a week? If it changes, will I feel smart or dumb?
-What will my neighbors think?
-Does it feel fair?
- and, What sort of risks (positive and negative) are involved? (This is why eBay auctions don't work for the masses).
Pricing based on cost, then, makes no sense whatsoever. Cost isn't abstract, but value is.