Stingy people are indeed not nice to work with, which is why I raised my prices as a freelance coder through the roof about 20 years ago, usually pacing about triple the going market rate. But filtering out stingy people isn't the main factor in the phenomenon you're describing, because some of my happiest customers have been stingy people who capitulated to paying much more than they initially thought the work was worth. They tend to also be the ones who are most prone to congratulating themselves and bragging to their friends on springing for the most expensive option, and when they do, they invariably (even pathologically) need to assert to themselves and everyone else that they paid for "the best".

The name for this is the Veblen Effect [0], and it applies to all irrational market behaviour where people are actually happier with luxury goods the more they pay for them.

Funnily enough, I've seen some of the exact same clients brag about how cheaply they got something else. The lesson I've drawn is that they're mostly looking for approval, so they're equally interested in buying status as they are in getting real stuff done. It's a win/win if you deliver a great product that they can brag about, because they'll do the hard work of selling it to themselves for you.

A corollary of that psychology is that some, maybe even most people are never happy with stuff they paid market price for. They either think they could've gotten it cheaper, or they think they could have gotten more for their money. Paying market price makes them feel like a chump. But paying way more than market has to be justified to themselves first. It's simply too embarrassing to admit that they might have overpaid an arm and a leg. So as a contractor, pricing your work as either very cheap or very expensive, on the margins of the parabola, alleviates this vague sense of dissatisfaction from your clients' internal debate, and gives them the peace of mind that they're actually trying to buy.

[0] https://en.wikipedia.org/wiki/Veblen_good

Value is relative. Effort-to-income ratios vary significantly between traders.

The pragmatic accept that work ≠ value, some do so permanently. But someone newly aware of this may deem it unfair, and react with totally disproportionate demands, some do so permanently.

Then you come across those who already benefit greatly from the imbalance, yet still make disproportionate demands. These tend to be good at it, subtle, strategic. Which may explain why they end up on the benefiting side.

Broadly, you find three types: the greedy, the balanced, and the generous pragmatic.

The greedy exploits relativity. The balanced respects it. The generous navigates it without resentment. Whether consciously or not.

It’s about the price subconsciously influencing the client’s evaluation of your competence.

Not to mention that "OSI open source" is basically sponsored and advocated by the firms that stand to benefit the most: hyperscalers that will embrace, extend, and encrust the thing you built with their monetization tendrils and leave you without a way to make money on it yourself.

See: Redis, Elastic, etc.

Not an ounce of AWS or GCP is open source, yet they'll happily spin up a managed version of your thing and make hundreds of millions without cutting you in.

We need new licenses that are more "shareware" like. That permit individuals, but slap big trillion dollar companies.

"Fair source", "Fair code", the defold license, etc. are all pretty good.