How much are we deluded by price?

A recent  academic study by Antonio Rangel of the California Institute of Technology (published by the Proceedings of the National Academy of Sciences) suggests that we can have a tendancy to turn our noses up at cheaper items even if they are essentially the same.   Interestingly, the implication of this is that if people are told that a wine they are drinking is more expensive when they are drinking it, they really do tend to think it tastes nicer, rather than just saying as much. From The Economist:

Dr Rangel gave his volunteers sips of what he said were five different wines made from cabernet sauvignon grapes, priced at between $5 and $90 a bottle. He told each of them the price of the wine in question as he did so. Except, of course, that he was fibbing. He actually used only three wines. He served up two of them twice at different prices.

This, of course, has implications not just for wine, but for other luxury goods.   Are we, without realisting it, all too frequently deluded by price?