I'm currently reading Dan Ariely's book, Predictably Irrational.  In it, he 
talks about one study he did that speaks to this question -- here's the 
abstract:
The authors demonstrate that marketing actions, such as pricing, can alter the 
actual efficacy of products to which they are applied. These placebo effects 
stem from activation of expectancies about the efficacy of the product, a 
process that appears not to be conscious. In three experiments, the authors 
show that consumers who pay a discounted price for a product (e.g., an energy 
drink thought to increase mental acuity) may derive less actual benefit from 
consuming this product (e.g., they are able to solve fewer puzzles) than 
consumers who purchase and consume the exact same product but pay its regular 
price. The studies consistently support the role of expectancies in mediating 
this placebo effect. The authors conclude with a discussion of theoretical, 
managerial, and public policy implications of the findings.
The full article can be found here: 
http://www.predictablyirrational.com/pdfs/Placebo1.pdf

Unrelated, but fascinating, check out this one: 
http://www.predictablyirrational.com/pdfs/Heat_of_Moment.pdf


--
Sue Frantz                 Highline Community College       
Psychology                Des Moines, WA
206.878.3710 x3404    [EMAIL PROTECTED]
http://flightline.highline.edu/sfrantz/ 
--
APA Division 2: Society for the Teaching of Psychology
http://teachpsych.org/
Office of Teaching Resources in Psychology
Associate Director
Project Syllabus
http://teachpsych.org/otrp/syllabi/syllabi.php



From: Jean-Marc Perreault
Sent: Tue 4/29/2008 2:28 PM
To: Teaching in the Psychological Sciences (TIPS)
Subject: [tips] Do we prefer more expensive items?


In a recent conversation with a colleague on tuition fees, I raised the
question of whether our local population would have a better impression
of their local community college if the tuition fees were higher. This
comment was made in part because we offer the lowest (or near that) fees
in the country. A 3-credit course tuition is 150$.

The local population has often been perceived (non-objectively I should
say) as being negatively biased towards the College. So I raised the
tuition question.

I seem to remember a study where a psychiatrist had changed location
from a prestigious office to a more modest locale, and had also raised
his fees, with the result of losing credibility/clients/etc (not sure
what the actual measure was, but it seems to be in those lines).

Does anyone know of research in that area?

That would be much appreciated... and please keep in mind that this
information WILL NOT be used to raise tuition fees. The College does not
have the power to do that anyhow... The government has that power...

Cheers!

Jean-Marc





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