When consumers taste cheap wine and rate it highly because they believe it is expensive, is it because prejudice has blinded them to the actual taste, or has prejudice actually changed their brain function, causing them to experience the cheap wine in the same physical way as the expensive wine? Research in the Journal of Marketing Research has shown that preconceived beliefs may create a placebo effect so strong that the actual chemistry of the brain changes.

"Studies have shown that people enjoy identical products such as wine or chocolate more if they have a higher price tag," write authors Hilke Plassmann (INSEAD) and Bernd Weber (University of Bonn). "However, almost no research has examined the neural and psychological processes required for such marketing placebo effects to occur."

Participants in one of the studies were told they would consume five wines ($90, $45, $35, $10, $5) while their brains were scanned using an MRI. In reality, subjects consumed only three different wines with two different prices. Another experiment used labels to generate positive ("organic") or negative ("light") expectations of the pleasantness of a milkshake. Some consumed identical milkshakes but thought they would be either organic or regular; others consumed identical milkshakes but thought they would be either light or regular.

Participants showed significant effect of price and taste prejudices, both in how they rated the taste as well as in their measurable brain activity. The MRI readings related in part to specific areas of the brain that differ from person to person. These differences are also associated with known differences in personality traits. The authors were able to further determine that people who were strong reward-seekers or who were low in physical self-awareness were also more susceptible to having their experience shaped by prejudices about the product.

"Understanding the underlying mechanisms of this placebo effect provides marketers with powerful tools. Marketing actions can change the very biological processes underlying a purchasing decision, making the effect very powerful indeed," the authors conclude.