The higher the price, the better the product?
Is consumer satisfaction linked to the price of the product?
A study by researchers at Duke University shows that people tend to react differently to medications depending on the price.
Two groups of study participants (82 people in total) were given two types of painkillers. One type costs $2.50, the other only 10 cents, according to brochures given to the participants. Their results show that 85% of those given the expensive painkillers experienced less pain than those who took the cheap pills.
But here`s the catch: both types of painkillers were actually identical in content ? they were both placebos.
One of the researchers is Dan Ariely, a behavioral economist who has conducted many studies on the so-called placebo effect. According to Ariely ?the placebo effect is about expectations, and we expect more-expensive medicines to work better.?
The effect of price is not only seen in medications but on consumer satisfaction with other products as well. In a previous study, they demonstrated a similar price effect on people who drank identical but differently priced energy drinks that were supposed to increase mental powers. Those who drank the more expensive drink performed better in certain mental tasks that those who drank the cheap version of the drink.
Moral of the story: The most expensive is not necessarily the best.
Waber, Shiv, Carmon & Ariely. Commercial Features of Placebo and Therapeutic Efficacy. Journal of American Medical Assocation March 5, 2008
Shiv, Carmon & Ariely, Journal of Marketing Research November 2005