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Hi. This is common.
First, verify that you really have a problem (that it isn't upshifting into 4th).
The most obvious and common sign of a problem is that the light (a yellow "up" arrow on the dash, at the right side) turns on and doesn't go off (usually, this is either a bad relay or wires -- see below) despite pushing the button. If the light isn't coming on at all, you should first determine if you really have any problem (without a tach, it's sometimes hard to tell, especially for new owners of Volvos who aren't used to the sounds and "vibration" of their car as it "communicates" its speed and engine rpm.
If you're in 4th gear (and assuming you've got a tach), you should be doing about 70 mph at 3,000 rpm. If you're only in 3rd gear, you'll be doing about a 1,000 rpm more than this, or around 4,000 (and quite noisy) at that road speed.
Assuming that you do have a problem, the four most common causes of these troubles are (in order of how often they occur):
1) Most common: bad relay (the little box behind the center vents, accessed by removing the glove box).
2) Short circuit (bad insulation) in the wires going down from the shifter to the transmission solenoid (which is mounted on the transmission).
[As I noted above, problems with these, above, usually are indicated by the dashboard light coming on.]
3 and 4) Bad switch in the gearshift, and bad solenoid [both of these are a toss-up as to which is more common -- they're both uncommon, compared to the first two]. The switch is easy to try, as you can "hot wire" it to see if doing so will "fix" the problem, and relatively inexpensive to replace if you find it faulty. The solenoid is rough -- expensive to replace, and hard to replace, too.
Hope this helped.
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