[newswasboring]

You are conflating price and quality. If there are two top level people equally good one will undercut the other. And if one lives in Bangalore and the other in SF the first will undercut massively. SF living expenses are an exception on a global market place.

[bawolff]

High end goods and services are not races to the bottom.

For example, when was the last time you saw an airline undercut their competitors' first-class ticket price? How many sports-car manufactures get in price wars with their competition?

If your services are supply-constrained and there is a string market, you can charge whatever you want (to an extent, at least many times your cost of living), your cost of living doesn't matter when setting your prices in that situation. Your value is what the market dictates, not how much it costs you to buy a loaf of bread.