Placebo Effect (Price and Expectation)
The placebo effect concerns changes associated with treatment expectations and context, even without an active treatment component. Ariely describes experiments in which a higher stated price increased reported pain relief, while raising questions about evidence and deception.
THE IDEA
History and Background
Placebo, from Latin "I shall please," originally referred to sham mourners. By 1785, it appeared in medical dictionaries. Early examples include Gerbi’s worm secretions (1794) and centuries of ineffective remedies like Egyptian mummy powder. The placebo effect has been documented in modern medicine through sham surgeries, such as internal mammary artery ligation (1955) and arthroscopic knee surgery (2002), in which similar improvement across groups challenged the specific benefit of the procedures. Improvement within a placebo group can also include natural recovery and other effects; it is not all attributable to expectation.
Mechanisms: Belief and Conditioning
Two proposed contributors are:
- Belief: Expectations about a drug, procedure or caregiver can influence symptoms such as pain.
- Conditioning: Repeated experiences create bodily expectations (e.g., Pavlovian responses). For example, seeing a nurse with a painkiller can release endorphins before injection.
The Role of Price
Experiments by Ariely and colleagues show that price significantly influences placebo effects:
- Veladone-Rx: Participants given a vitamin C capsule labeled as a painkiller reported more relief when it cost $2.50 than $0.10. Only half of the discount group experienced relief.
- SoBe Adrenaline Rush: Students who paid full price reported less fatigue and solved more anagrams (9/15) than those who paid a discount (6.5/15). Hyping the drink with scientific claims amplified the effect.
- Cold Medications: A study at the University of Iowa found that students buying full-price cold remedies reported better outcomes than those buying discount versions.
Examples in Real Life
- Royal Touch: Medieval kings were believed to cure scrofula through touch. The practice faded as monarchs lost divine status.
- Airborne: A fizzy vitamin supplement with unsubstantiated cold prevention claims. Ariely describes feeling immediate relief, then losing confidence after the company paid $23.3 million over false-advertising claims. His experience illustrates a change in belief, not a controlled test of the supplement.
- Jobst Suit: Extremely painful pressure garment for burn scars; Ariely questions its benefit in his own treatment, illustrating why an intervention’s effects should be tested rather than inferred from personal experience alone.
Ethical Considerations
Placebos raise ethical dilemmas: Is it right to give sham treatments? Do expensive drugs improve outcomes? Should doctors prescribe placebos knowingly? Ariely argues that failing to test an ineffective intervention also has ethical costs, including unnecessary suffering and waste.
When to use it
Choosing between brand-name and generic drugs: recognizing that price may influence perceived effectiveness.
When evaluating a treatment, use an appropriate control to estimate the benefit of its active component. Distinguish that comparison from measuring changes within a placebo group.
In marketing, pricing strategies can be used to signal quality and enhance user experience.
For healthcare policy, understanding the placebo effect of expensive treatments can inform cost-benefit analyses.
FROM THEORY TO EVERYDAY LIFE
In practice
Internal Mammary Artery Ligation (1955)
The account describes Leonard Cobb’s sham-surgery comparison for angina. Similar reported relief in the groups challenged the added benefit of the surgical procedure; improvement in a placebo group alone does not identify how much was caused by expectation.
Arthroscopic Knee Surgery (2002)
The account describes Moseley’s comparison of arthroscopic surgery, lavage and sham surgery for knee osteoarthritis. Similar improvement across the groups challenged the specific benefit of the procedures in that study.
Veladone-Rx Experiment
Participants took a vitamin C capsule labeled as painkiller Veladone-Rx. At $2.50, almost all reported reduced pain from electric shocks; at $0.10, only half did. Price drove the placebo effect.
SoBe Adrenaline Rush Study
The excerpt separately reports 28% more word puzzles solved by the full-price group. That figure does not match the ratio of the group averages given above, so the two descriptions should not be treated as the same calculation without the original study.
A MOMENT TO REFLECT
Put it to work.
How does the price of a medication influence your perception of its effectiveness? Can you recall a time when a more expensive treatment seemed to work better?
Why is it important to conduct placebo-controlled trials for medical procedures even if they seem effective?
How can marketers ethically use the placebo effect to enhance product perception without deceiving consumers?
Often confused with
References
- Sham surgery for angina pectoris — Cobb, L. et al. (1955)
- Arthroscopic surgery for osteoarthritis of the knee — Moseley, J.B. et al. (2002)
- Commercial features of placebo and therapeutic efficacy — Waber, R., Shiv, B., Carmon, Z., & Ariely, D. (2008)
CONTINUE THE CONVERSATION
Source texts
- Predictably Irrational by Dan Ariely