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If something is expensive, you ask yourself "what justifies this price", with the expectation of greater quality, features, stability, support or whatever.

If something is free, you also ask "what justifies this price", but this time you expect things to be missing, flawed, incomplete, contains viruses, etc. You're instantly looking for whats wrong, not whats great.

So, yeah, pricing is a signal.

Wine. At a restaraunt. Sure, it's a textbook example - but that's because it's so common. People don't want to buy the cheapest wine - so they get something from the middle of the list.

Price can send a signal about the STATUS of the object - and this can be more powerful than any signals about the quality!

> I don't think pricing is a signal.

Then I recommend that you begin reading http://marginalrevolution.com/ as soon as possible.