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> Universities are the classic example, Harvard would never lower its prices to be more appealing than Yale.

This would sound more convincing if Princeton hadn't already done that exact thing.

Well, obviously there's an upper limit to that game, but I would bet Princeton's issue wasn't that they were failing to fill classrooms at the higher price point.

Harvard’s signal is how hard it is to get in. There are less prestigious universities with a higher sticker price. Bad example, but I agree with your point in general.

Apparently further beyond "Veblen", price stops being a signal because the very wealthy have money. The signal has to change to other more scarce resources: https://news.ycombinator.com/item?id=47265889