I recently had cause to visit Ambleside - a pleasant tourist-trap at the head of England's largest lake and a perennial parking nightmare. I drove at a crawl once around the town and twice around the town's largest car park without success. Finally I found a spot in a privately owned parking lot. I trudged to the ticket machine through the rain and on seeing the price, my first thought was not economically rational. It was, “That's a rip-off.”

We have a complicated emotional relationship with prices. To the rational utility-maximiser of the economics textbook, a price is an exchange rate between different possible products. Outside the textbook a price can be a signal of quality (“reassuringly expensive”) or a desperate bid for attention (“FREE shipping”).

A price can also feel like a slap in the face. The simple logic of supply and demand suggests that front-row seats for the Wimbledon final should be expensive. So should bottled water after a hurricane, snow shovels after a blizzard and Ambleside parking spaces over the Christmas holiday. And yet a vendor who tries charging a price high enough to eliminate the shortages will be accused of despicable greed.