I agree, but enough people don't that it can quickly turn a community, or portion of it, against the business.

There's also the desire to not price out the loyal customers that got you to where you are.

This is pretty astute.

Theoretically, the owner could probably get away with charging quite a lot more. If he were a cynical man/short-termist he could double/triple his prices (possibly even 10x his prices) and still be turning away business in the next couple of weeks while the hype train is running. The spectrum of prices for food in Singapore is pretty wide, you can easily have a meal for anywhere from 4SGD to 200+SGD so there would still be people up for trying Michelin-quality chicken rice if he suddenly started charging 20SGD for a meal.

That will definitely rub the community up the wrong way, given that hawker food is very much deeply entwined with the local community and relies heavily on regulars. The owners are often from the community too so such behaviour would incite feelings of "casting aside your roots".

Would seriously love to give this a try though, when I think of michelin food I tend to think of Heston-style experimental cuisine, which pushes the boundaries of food and employs novel cooking techniques. This type of food is labour intensive though and doesn't really work when one guy in a stall is serving 180 chickens a day. Hawker food done right is like the pinnacle of home-cooking so would be good to taste first-hand how good this is!

One reason might be too attract a certain kind of clientele. I know AirBnB people who charge less than what the market will bear, because they know that at a higher price point customers will be much more demanding - both because of the psychological impact of paying more, but also because the kind of people who can afford $100/night are likely to be older and more picky.

Similarly, by charging less and having a line out the door you get to enforce standardization and other nice things on your customer base.

My experience with AirBnB is opposite.

The higher the price I charged, the nicer, cleaner, more-accomodating, courteous, and non-demanding the clientele.

The lowest-price guests were rude, uneducated (scratching non-stick pans with forks, for example), noisy, ungracious, and otherwise a huge pain.

Likely because people paying higher price points have ample cash and aren't watching every penny they spend.

I agree that it is an American perspective, but not everyone shares it. Case in point: my wife offers horseback riding lessons and is very good at it. She is recommended enough that new clients have said "you got such good recommendations that I wasn't sure I could afford you."

Yet she charges under $40/hour even though I remind her that she could easily get north of $60/hour based on what I've seen people will pay. Her response: "I want to make it accessible to people." Great motivation, but poor profit.

I should add, though, that part of it is what another poster mentioned below: beyond a certain price point you tend to get a class of customer that's simply annoying to deal with.