In this post, Uwe Heiss explores the effect of placebo pricing on pain management.
Here is an interesting study about placebo pricing (Waber 2008). Dan Ariely, a behavioral economist at Duke University showed in a study with 82 healthy volunteers that the price of pills contributes to their placebo effect. All study participants got a painful stimulus – they were given an electric shock. They were then offered a placebo pill for pain relief and received the same stimulus again. The price of the placebo made a difference:
85% of volunteers who took placebos priced at $2.50 per pill experienced less pain after taking the placebo pill
61% experienced pain relief who took the same pill, but priced at 10 cents
That’s more than a 20% difference between groups. So this study nicely supports our hypothesis:
Higher price increases the placebo effect.
Does this sound familiar? The placebo effect seems to be a variation of a more general theme. Do you have examples in your field? And how much should I charge for one pill of Zeebo Relief? Right now it’s at 44 cents…
Read the full article, The Price of Feeling Better, on LinkedIn.