Business
Setting price as cost plus a markup feels safe, but it never tells you how much buyers would actually have paid. If the product turns out to be worth more than you assumed, the extra value is quietly left on the table and you never learn what you lost.
Pricing by matching what competitors charge seems safe, but when everyone does it, prices ratchet downward. To afford the lower prices, firms then cut costs, so service quality falls along with price and the whole industry ends up worse off.
Letting buyers set the price only works when producing one more unit costs almost nothing, so low payers do no harm, and when loyal fans will pay extra to support the seller. A product with high per-unit costs and no devoted following, like fuel, would be ruined by it.