In cases where today’s offer price is not much different from the price I paid the last time I bought a similar item, the markets work perfectly well. Everyone accepts that the price is fair if it accords with their expectations, and our expectations are formed on the basis of previous experience.
The market does work, for known products with which everyone is familiar, and for modest price variation. The market cannot provide a fair estimate of value when the product is unknown, and when prices vary sharply over time. For new or unfamiliar products there is no reference price to use as a point of departure.