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Premium pricing (also called prestige pricing) is the strategy of consistently pricing at, or near, the high end of the possible price range to help attract status-conscious consumers. Examples of companies which partake in premium pricing in the marketplace include Rolex and Bentley. People will buy a premium priced product because:

They believe the high price is an indication of good quality;

They believe it to be a sign of self worth - "They are worth it;" it authenticates the buyer's success and status; it is a signal to others that the owner is a member of an exclusive group;

They require flawless performance in this application - The cost of product malfunction is too high to buy anything but the best - example : heart pacemaker.