You Get What You Pay For: Physical Placebo Effects of Price Discounts: An Abstract

Abstract

Placebo effects, generally known from medicines, became more and more important in the field of marketing (Shiv et al. 2005), although it is still underexplored. A placebo effect can briefly be described as an effect of a substance or treatment, which is actually not due to the inherent power of the substance or treatment (Stewart-Williams and Podd 2004). Transferring this phenomenon into the marketing context, research of placebo marketing focusses on behavioral effects of consumers due to product attributes, which actually do not elicit those certain effects (Shiv et al. 2005). Those product attributes are actually not related to the effect or even values of the product, because they cannot directly be referred to its ingredients or functions. Nevertheless, they do influence the product value, whereas this effect is not necessarily positive. Thus, for example, price discounts can lead to undesirable placebo effects (Shiv et al. 2005). This study addresses the influence of a price placebo effect on physical performance, analyzing the impact of a price discount in terms of a placebo effect on consumers’ expectations (psychological effects) and actual physical performance. One hundred one undergraduate students took part in a between-subjects field experiment, where they consumed dextrose (regular price vs. discounted price), evaluated their expectation of physical performance, and participated in a physical performance task. First the experimenter and the assistants were handing out water bottles, the questionnaires, and writing utensils. Afterward, the participants had to perform the following task: while standing up, they were holding a 1.5 L bottle of water straight with their “weak” arm as long as they could (right-handers were holding it with their left arm and vice versa). The time was stopped by five supervisors for every person. After the first run, participants were told that this experiment is a product test, testing a new recipe of dextrose of the brand Dextro Energy. Therefore, they have to consume the dextrose and then perform the task again. The discounted price of the dextrose led to lower participants’ expectations of their physical performance, which in turn reduced the actual physical performance compared to the regular price condition. Thereby these research findings offer important theoretical and practical implications.