You could see it that way, but (at least this is my theory :P) most people see a large price tag and compare it to a cheap one and assume the item is of higher quality. I mean, it's just logic; no one with any sense would mark a stick $20 and a high quality chew toy 50 cents.
Anyway, it's like this thing someone told me once; I think it was my History teacher. He said there are these headphones made by this brand called Skullcandy or something. True to its name, the brand makes headphones with tiny little skull decorations. Nothing big at all. There are also some pretty good but cheap headphones, but plain. Exact same quality, the only difference is the decoration. And the price. Some several tens, can't remember, but there was a WAY too big price gap for some stupid skulls.
So, pretend you have McDonalds vs some restaurant. Say you order basically the same salad at each place (Oh yeah, salad at McDonald's, you must be so healthy :P). They taste pretty much the same, have similar nutritional value, but even though the price of that restaurant salad is pushing your budget, doesn't that look a THOUSAND times tastier than that stupid McDonald's salad, am I right? And besides, I mean, if it's twice as expensive as the other one, it must be twice as good.