Good Morning!

We start with a contradiction that says a lot about the moment we’re in: the U.S. economy just shrank for the first time in years, companies are laying off tens of thousands, and yet Wall Street still managed to find reasons to cheer. Tariffs are back on the table, consumer spending is slowing, and inflation is inching up—but banks like Barclays are beating profit expectations, and stablecoins are quietly positioning themselves as the future of global finance.

This week alone feels like a masterclass in mixed signals. Meta continues to cut jobs while AI investment surges. HSBC’s profits dropped, but it launched a $3 billion share buyback anyway. UPS is slashing 20,000 jobs due to automation, while investors reward companies that promise faster, cheaper, leaner. It’s hard to tell if we’re heading into a recession or just rearranging the furniture. Markets seem less interested in the actual data and more focused on the story they want to believe.

Welcome to Part Three of Irrational Thinking in a Logical Economy. Today, we’re looking at the strange split between economic fundamentals and market behavior—why the numbers say slowdown, but the mood says “full speed ahead.” Because in a system driven by perception as much as performance, the real question isn’t whether the economy is slowing down. It’s whether anyone’s willing to admit it.

-JD

 Coming up in Tuesday’s edition:

We’re unpacking the logic (and chaos) of Amazon. How a company that started with books turned into a digital empire that touches nearly every corner of the economy. From algorithmic pricing to warehouse domination, Prime addiction to Alexa surveillance, Amazon isn’t just a marketplace—it’s an infrastructure. This isn’t just about convenience. It’s about how scale, speed, and control can turn two-day shipping into a business model that rewrites the rules of capitalism.

Part 3 of 10 in Irrational Thinking in a Logical Economy
by JD Washington

The Price of Perception

Products are supposed to be priced based on what they do. That’s the idea, anyway. A phone should cost more than a flip-flop because one connects you to the world and the other protects your feet. Value, we’re told, is a function of utility. It’s what something does that determines what it’s worth. But if that were really how markets worked, luxury handbags wouldn’t cost more than used cars. No one would spend $7 on a bottle of water with a glacier on the label. And the difference between a $20 shirt and a $200 one wouldn’t come down to a logo stitched over the chest.

Yet over and over again, we see price shaped less by the function of a product and more by how it makes us feel—what it represents. It’s not utility that dictates value, but perception. We’re not just buying objects; we’re buying identity, status, nostalgia, belonging. The story wrapped around the product becomes more powerful than the product itself. That’s not a marketing glitch, it’s the business model. In a world saturated with options, the product alone isn’t enough. The differentiator (the multiplier) is meaning.

Take Apple. On paper, it’s a technology company. But in practice, it behaves more like a luxury brand or a design house. Its product launches are theatrical, its stores are architectural, its packaging has been studied in business schools. But the real innovation isn’t the chip inside the device, it’s the perception surrounding it. Apple doesn’t just sell tools; it sells taste. It tells a story about creativity, intelligence, minimalism, and control. And that story is so compelling that millions of people are willing to pay a premium for hardware that, in many cases, is functionally similar to cheaper alternatives. That’s not a critique of Apple, it’s a case study in the economics of belief.

This isn’t just branding as decoration. It’s branding as a value engine. And what fuels that engine? Human psychology. We like to think we’re rational decision-makers, carefully weighing costs and benefits, comparing specs, and calculating ROI. But that’s rarely how real-life decisions unfold. Instead, we lean on shortcuts—biases and heuristics that help us make quick judgments but often lead us away from strict logic. Anchoring, for example, is why we think a $70 T-shirt on sale for $30 is a bargain, even if we never would’ve considered spending $30 in the first place. Scarcity taps into our fear of missing out: when we see “limited edition” or “only 3 left in stock,” the product feels more valuable, even if the urgency is artificially created. And framing (the subtle art of how information is presented) can shift our perception entirely. We’d rather buy something labeled “95% fat-free” than “5% fat,” even though they mean the same thing.

These psychological tools aren’t new, and they’re not even always manipulative. They’re just how the brain works. But when brands understand how to use them (when they combine a compelling story with emotional triggers) the result is a product that transcends its own utility. And when we, as consumers, buy into that story, we’re often doing so without realizing just how much of our decision is emotional. We justify our purchases after the fact. “It’s better quality,” we’ll say. “It lasts longer.” “I needed it.” But often, what we’re really saying is, “It made me feel a certain way.”

That gap between function and feeling (between utility and perceived value) is where some of the most powerful brands live. And it’s not just Apple. It’s Patagonia, which sells sustainability as much as it sells outerwear. It’s Supreme, which turns a limited drop into a social event. It’s bottled water brands, makeup lines, wellness products, sneakers. Entire industries are built on the art of making something feel more valuable than it strictly is. That’s not to say these products don’t deliver (they often do) but what makes them premium isn’t just performance. It’s perception.

Classical economics doesn’t quite know what to do with this. The foundational model assumes people behave rationally. That consumers are calculators maximizing utility. But in reality, we’re storytellers. We buy into meaning, symbolism, community. We want to belong. We want to believe. And those desires show up in the numbers, often in ways the models can’t predict. That’s why two nearly identical products can command wildly different prices. That’s why people line up overnight for shoes they’ll never wear. That’s why NFTs sold for millions. The stories were just that good.

So what’s the takeaway? Not that we’re irrational, but that we’re human. That value isn’t purely mechanical, it’s emotional, contextual, and deeply cultural. In the modern economy, the most successful brands don’t just sell products. They sell narratives. And those narratives shape our decisions more than we care to admit.

The price of perception, then, is not a bug in the system. It is the system. Until we understand that, we’ll keep confusing brand with quality, and storytelling with substance. Because in the end, we don’t just consume products. We consume the stories that come with them. 

A message from Projekts Workshop

At Projekts Workshop, we help brands find their voice, sharpen their story, and show up with purpose.

We design and run newsletter strategies that align your message, voice, and content—delivering consistent, audience-focused stories across email and social. And we build brand strategies that connect positioning, messaging, and visual identity into one cohesive, lasting story.

Whether you’re building, rebuilding, or growing, we’re here to help you do it with clarity, confidence, and consistency.