Predictably Irrational (23 page)

Once you finish reading the brochure, Taya calls in Rebecca Waber and leaves the room. Rebecca, wearing the white coat of a lab technician, with a stethoscope hanging from her neck, asks you a set of questions about your medical condition and your family's medical history. She listens to your heart and measures your blood pressure. Then she hooks you up to a complicated-looking machine. The electrodes running from the machine, greased with a green electrode gel, encircle your wrists. This is an electrical shock generator, she explains, and it is how we will test your perception and tolerance of pain.

With her hand on the switch, Rebecca sends a series of electrical shocks through the wires and into the electrodes. The initial shocks are merely annoying. Then they become painful, more painful, and finally so painful that your eyes fly open and your heart begins to race. She records your reactions. Now she starts delivering a new set of electrical shocks. This time she administers a set of charges that fluctuate randomly in intensity: some are very painful and some merely irritating. Following each one, you are asked to record, using the computer in front of you, the amount of pain you felt. You use the mouse to click on a line that ranges from “no pain at all” to “the worst pain imaginable” (this is called a “visual pain analog”).

When this part of the torture ends, you look up. Rebecca is standing before you with a Veladone capsule in one hand and a cup of water in the other. “It will take about 15 minutes for the drug to reach its maximal effect,” she says. You gulp it down, and then move to a chair in the corner, where you look at the old copies of
Time
and
Newsweek
until the pill takes effect.

Fifteen minutes later Rebecca, smearing the electrodes with the same green electrode gel, cheerfully asks, “Ready for the next step?” You say nervously, “As ready as I can be.” You're hooked up to the machine again, and the shocks begin. As before, you record the intensity of the pain after each shock. But this time it's different. It must be the Veladone-Rx! The pain doesn't feel nearly as bad. You leave with a pretty high opinion of Veladone. In fact, you hope to see it in the neighborhood drugstore before long.

Indeed, that's what most of our participants found. Almost all of them reported less pain when they experienced the electrical shocks under the influence of Veladone. Very interesting—considering that Veladone was just a capsule of vitamin C.

F
ROM THIS EXPERIMENT,
we saw that our capsule did have a placebo effect. But suppose we priced the Veladone differently. Suppose we discounted the price of a capsule of Veladone-Rx from $2.50 to just 10 cents. Would our participants react differently?

In our next test, we changed the brochure, scratching out the original price ($2.50 per pill) and inserting a new discount price of 10 cents. Did this change our participants' reaction? Indeed. At $2.50 almost all our participants experienced pain relief from the pill. But when the price was dropped to 10 cents, only half of them did.

Moreover, it turns out that this relationship between price and placebo effect was not the same for all participants, and the effect was particularly pronounced for people who had more experience with recent pain. In other words, for people who had experienced more pain, and thus depended more on pain medications, the relationship was more pronounced: they got even less benefit when the price was discounted. When it comes to medicines, then, we learned that you get what you pay for. Price can change the experience.

I
NCIDENTALLY, WE GOT
corroborating results in another test, a study we conducted one miserably cold winter at the University of Iowa. In this case we asked a group of students to keep track of whether they used full-price or discount medicines for their seasonal colds, and if so, how well those remedies worked. At the end of the semester, 13 participants said they'd paid list price and 16 had bought discount drugs. Which group felt better? I think you can guess by now: the 13 who paid the list price reported significantly better medical outcomes than the 16 who bought the medication at a discount. And so, in over-the-counter cold medication, what you pay is often what you get.

F
ROM OUR EXPERIMENTS
with our “pharmaceuticals” we saw how prices drive the placebo effect. But do prices affect everyday consumer products as well? We found the perfect subject in SoBe Adrenaline Rush, a beverage that promises to “elevate your game” and impart “superior functionality.”

In our first experiment, we stationed ourselves at the entrance of the university's gym, offering SoBe. The first group of students paid the regular price for the drink. A second group also purchased the drink, but for them the price was marked down to about one-third of the regular price. After the students exercised, we asked them if they felt more or less fatigued relative to how they normally felt after their usual workouts. Both groups of students who drank the SoBe indicated that they were somewhat less fatigued than usual. That seemed plausible, especially considering the hefty shot of caffeine in each bottle of SoBe.

But it was the effect of the price, not the effect of the caffeine, that we were after. Would higher-priced SoBe reduce fatigue better than the discounted SoBe? As you can imagine from the experiment with Veladone, it did. The students who drank the higher-priced beverage reported less fatigue than those who had the discounted drink.

These results were interesting, but they were based on the participants' impressions of their own state—their subjective reports. How could we test SoBe more directly and objectively? We found a way: SoBe claims to provide “energy for your mind.” So we decided to test that claim by using a series of anagrams.

It would work like this. Half of the students would buy their SoBe at full price, and the other half would buy it at a discount. (We actually charged their student accounts, so in fact their parents were the ones paying for it.) After consuming the drinks, the students would be asked to watch a movie for 10 minutes (to allow the effects of the beverage to sink in, we explained). Then we would give each of them a 15-word puzzle, with 30 minutes to solve as many of the problems as they could. (For example, when given the set TUPPIL, participants had to rearrange it to PULPIT—or they would have to rearrange FRIVEY, RENCOR, and SVALIE to get . . . ).

We had already established a baseline, having given the word-puzzle test to a group of students who had not drunk SoBe. This group got on average nine of the 15 items right. What happened when we gave the puzzles to the students who drank SoBe? The students who had bought it at the full price also got on average about nine answers right—this was no different from the outcome for those who had no drink at all. But more interesting were the answers from the discounted SoBe group: they averaged 6.5 questions right. What can we gather from this? Price does make a difference, and in this case the difference was a gap of about 28 percent in performance on the word puzzles.

So SoBe didn't make anyone smarter. Does this mean that the product itself is a dud (at least in terms of solving word puzzles)? To answer this question, we devised another test. The following message was printed on the cover of the quiz booklet: “Drinks such as SoBe have been shown to improve mental functioning,” we noted, “resulting in improved performance on tasks such as solving puzzles.” We also added some fictional information, stating that SoBe's Web site referred to more than 50 scientific studies supporting its claims.

What happened? The group that had the full-price drinks still performed better than those that had the discounted drinks. But the message on the quiz booklet also exerted some influence. Both the discount group and the full-price group, having absorbed the information and having been primed to expect success, did better than the groups whose quiz cover didn't have the message. And this time the SoBe did make people smarter. When we hyped the drink by stating that 50 scientific studies found SoBe to improve mental functioning, those who got the drink at the discount price improved their score (in answering additional questions) by 0.6, but those who got both the hype and the full price improved by 3.3 additional questions. In other words, the message on the bottle (and the quiz cover) as well as the price was arguably more powerful than the beverage inside.

A
RE WE DOOMED,
then, to get lower benefits every time we get a discount? If we rely on our irrational instincts, we will. If we see a discounted item, we will instinctively assume that its quality is less than that of a full-price item—and then in fact we will make it so. What's the remedy? If we stop and rationally consider the product versus the price, will we be able to break free of the unconscious urge to discount quality along with price?

We tried this in a series of experiments, and found that consumers who stop to reflect about the relationship between price and quality are far less likely to assume that a discounted drink is less effective (and, consequently, they don't perform as poorly on word puzzles as they would if they did assume it). These results not only suggest a way to overcome the relationship between price and the placebo effect but also suggest that the effect of discounts is largely an unconscious reaction to lower prices.

S
O WE'VE SEEN
how pricing drives the efficacy of placebo, painkillers, and energy drinks. But here's another thought. If placebos can make us feel better, should we simply sit back and enjoy them? Or are placebos patently bad—shams that should be discarded, whether they make us feel good or not? Before you answer this question, let me raise the ante. Suppose you found a placebo substance or a placebo procedure that not only made you feel better but actually made you physically better. Would you still use it? What if you were a physician? Would you prescribe medications that were only placebos? Let me tell you a story that helps explain what I'm suggesting.

In AD 800, Pope Leo III crowned Charlemagne emperor of the Romans, thus establishing a direct link between church and state. From then on the Holy Roman emperors, followed by the kings of Europe, were imbued with the glow of divinity. Out of this came what was called the “royal touch”—the practice of healing people. Throughout the Middle Ages, as one historian after another chronicled, the great kings would regularly pass through the crowds, dispensing the royal touch. Charles II, who ruled England from 1660 to 1685, for instance, was said to have touched some 100,000 people during his reign; and the records even include the names of several American colonists, who returned to the Old World from the New World just to cross paths with King Charles and be healed.

Did the royal touch really work? If no one had ever gotten better after receiving the royal touch, the practice would obviously have withered away. But throughout history, the royal touch was said to have cured thousands of people. Scrofula, a disfiguring and socially isolating disease often mistaken for leprosy, was believed to be dispelled by the royal touch. Shakespeare wrote in
Macbeth
: “Strangely visited people, All sworn and ulcerous, pitiful to the eye . . . Put on with holy prayers and 'tis spoken, the healing benediction.” The royal touch continued until the 1820s, by which time monarchs were no longer considered heaven-sent—and (we might imagine) “new, improved!” advances in Egyptian mummy ointments made the royal touch obsolete.

When people think about a placebo such as the royal touch, they usually dismiss it as “just psychology.” But, there is nothing “just” about the power of a placebo, and in reality it represents the amazing way our mind controls our body. How the mind achieves these amazing outcomes is not always very clear.
*
Some of the effect, to be sure, has to do with reducing the level of stress, changing hormonal secretions, changing the immune system, etc. The more we understand the connection between brain and body, the more things that once seemed clear-cut become ambiguous. Nowhere is this as apparent as with the placebo.

In reality, physicians provide placebos all the time. For instance, a study done in 2003 found that more than one-third of patients who received antibiotics for a sore throat were later found to have viral infections, for which an antibiotic does absolutely no good (and possibly contributes to the rising number of drug-resistant bacterial infections that threaten us all
¹⁹
). But do you think doctors will stop handing us antibiotics when we have viral colds? Even when doctors know that a cold is viral rather than bacterial (and many colds are viral), they still know very well that the patient wants some sort of relief; most commonly, the patient expects to walk out with a prescription. Is it right for the physician to fill this psychic need?

The fact that physicians give placebos all the time does not mean that they want to do this, and I suspect that the practice tends to make them somewhat uncomfortable. They've been trained to see themselves as men and women of science, people who must look to the highest technologies of modern medicine for answers. They want to think of themselves as real healers, not practitioners of voodoo. So it can be extremely difficult for them to admit, even to themselves, that their job may include promoting health through the placebo effect. Now suppose that a doctor does allow, however grudgingly, that a treatment he knows to be a placebo helps some patients. Should he enthusiastically prescribe it? After all, the physician's enthusiasm for a treatment can play a real role in its efficacy.

Here's another question about our national commitment to health care. America already spends more of its GDP per person on health care than any other Western nation. How do we deal with the fact that expensive medicine (the 50-cent aspirin) may make people feel better than cheaper medicine (the penny aspirin). Do we indulge people's irrationality, thereby raising the costs of health care? Or do we insist that people get the cheapest generic drugs (and medical procedures) on the market, regardless of the increased efficacy of the more expensive drugs? How do we structure the cost and co-payment of treatments to get the most out of medications, and how can we provide discounted drugs to needy populations without giving them treatments that are less effective? These are central and complex issues for structuring our health care system. I don't have the answers to these questions, but they are important for all of us to understand.