There’s a few things going on here.
First, some of these products really are much higher quality and require a lot more effort to make. In addition, many of the highest-quality items are made by hand. Any time you can crank stuff out on an assembly line the manufacturing cost drops dramatically.
A related issue is economy of scale. If you want to make something out of an exotic material or with fine jewel-like craftsmanship, by necessity the market for it is going to be rather small. That means you have fewer sales to regain your design costs, fixed manufacturing costs, management overhead, etc. So the price tends to skyrocket.
Then there’s Thorstein Veblen. He was an economist (the guy who coined the phrase ‘conspicuous consumption’) who noted that there is a certain special class of goods for which the demand increases with cost, which is the inverse of what normally happens. ‘Veblenesque’ goods would be things like Prada handbags, extremely expensive perfumes and makeup, and other such goods. To people who engage in conspicuous consumption, higher prices equal greater value, because the fact that they can afford this expensive stuff impresses others in their class.
But a lot of this expensive stuff really is expensive for a reason. A Brietling watch may not keep time any better than a $20 Timex, but it’s also fine jewelry. Have a look at the quality of the lettering on the dials, the finish of the hands, the quality of the intricate movement, etc.
A $400,000 Maybach is no faster or smoother than an $80,000 Lexus, but the money is in the details. The switchwork, the fine detailing, the higher grades of leather, the expensive, hand-fitted woods and accents, etc.
I have a pool cue that’s worth about $1,000. I got it as a gift years and years ago, and absolutely love it. But it doesn’t play any better than a $50 Dufferin cue. After all, a cuestick is just a length of wood with a leather tip on the end. So why the $1,000? Because it’s beautiful. It’s got 8 ebony inlays around the butt, all kinds of detailing, and the butt is made from fancy cocobolo wood. It’s wrapped in Irish linen, and feels very nice in the hand. An artisan put dozens of hours into hand carving the inlays and such. And the thing is, 20 years from now it’ll be worth more than it was new, whereas a typical mass-produced cue won’t.
But really, all that is justification. No one needs this stuff. But if you wear rings or necklaces, you’re spending money on stuff that has no useful value whatsoever. It’s purely decorative. I fail to see how spending $1,000 on a fine watch is any less rational than spending $1000 on a diamond ring.