Philistine, you chose the absolute worst example possible of you get what you pay for, because with hookers it's only you get something you want for whatever amount of money you're willing to pay.
Maybe I am misunderstanding your point John, but if you are suggesting that hookers are homogenously price inelastic I disagree.
I actually think hookers are a pretty good example of "you get what you pay for", they operate in a very competitive and liquid market, and the range of quality of service (along with price) is extremely wide, and the exponential improvements in the amenity of the good as the price increases can be viscerally appreciated by the consumer. If you take another luxury item, such as wine for example, in my opinion a very limited number of people can genuinely taste the difference in amenity between a $50 bottle of wine, and a $5,000 bottle of wine (in fact I would propose that even if they could taste the difference, they are tasting a difference in qualities, not the quality itself), but any man with a beating heart can blind taste the difference in quality between a $50 an hour hooker and a $5,000 an hour hooker, and there will be no argument by anyone anywhere as to which is of the higher quality. And there is an interesting reason as to why there is this difference between those luxury goods, hookers are done in private (usually), whilst wine drinking is done in company (usually). So in my opinion people pay $5,000 for a bottle of wine for the amenity of status (which means the premium has no relationship to the quality of the good really), whereas people don't pay $5,000 for a high class hook to show off, noone is watching, they do it because they have tried it before, and they consider the amenity they will get to be worth it. There will of course be those who shake their head and think that is way too much money to spend, but that doesn't mean the consumer isn't paying a fair market price for a very real and genuine (as in visceral, as opposed to conceptual) amenity.
Plus what can be had for free is always better.
That will of course depend on your definition of "better". There is a large amount of literature dedicated to the human tendancy, when given a binary option, to choose an item of less amenity for free, over an item of vastly higher amenity for a very cheap price, and is rooted deep in the human preference for risk aversion. So I suspect you might be right that our strong preference for free/low amenity over cheap/high amenity, will mean that funnily enough we probably experience more subjective pleasure in the acquisition and consumption of the thing we didn't really want for free, over the thing we did want which was cheap. But if I only ate at the soup kitchens that let my kind in for free, I would have a pretty unsavoury diet.
How did I make this whole thread a philosophical meditation on hookers?.... We aren't even in the Biker Bar...... I'll get my coat......
Apologies to the OP.
Quick, someone start a fight about how overpriced Stealth Bombers are....