A fascinating paper by Baba Shiv, Ziv Carmon, and Dan Ariely in the November, 2005 issue of the Journal of Consumer Research explored how placebo effects are influenced by what people know about the placebo.

In a series of studies, these researchers had people imbibe an energy drink that was advertised as affecting people's mental ability. To determine the effect of the drink on people's performance, they measured the number of words that people were able to unscramble. The key aspect of the study focused on the information that people were given about the drink.

The control group unscrambled 7 words correctly. Those people who read that the drink was not so effective generally did worse than the control group, while those who read that the drink is highly effective did better than the control. The price of the drink also affected performance. Those who got the discounted drink also performed worse overall than those who received the full-price drink. Indeed, the people who got the worst combination of information (the drink is only slightly effective and was low-priced) unscrambled only about 4 words correctly, while those who got the best combination of information (the drink is highly effective and regularly priced) identified over 10 words correctly.

As part of the study, people were asked to rate how effective they thought the drink would be at influencing their thinking ability. These ratings were a good predictor of people's performance. That is, the more that people believed in the drink, the more that it had an effect on the number of words they unscrambled.

These results are quite important for thinking about placebo effects. You might think that you get placebo effects just from being a part of an intervention. For example, you may learn that taking a pill makes you feel better, and so your body may react in ways that make you feel better whenever you take a pill.

These results suggest that part of the effect of a placebo is based on how much you believe in it. All of the factors that determine whether you think something will work as promised can influence placebo effects. That is why price affects the placebo effect. We normally think of discount products as being less effective than full-price products. That same belief also influences the placebo effect.

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