Newsletter  >  Exploring the Mind (July 10, 2008)

Exploring the Mind: A Newsletter

Psychology, Brain Science, & Hypnosis


My dad is probably the most rational man I have ever met. So, for a while when I was growing up, I thought rationality ruled the world.

Over the years, I, of course, found out the hard way that people just aren't rational.

Then, after digging myself into many holes, I realized that I myself didn't make rational decisions all of the time, or even a fraction of the time.

What I didn't know is that there is a new branch of research that is actually studying irrational thinking – and even more interesting
is that . . .

The research is mounting that our irrational choices are actually predictable.

This has significant impacts, because some of this new knowledge about human thinking and behavior is being used to manipulate you. Often it's used to direct you into making decisions that are not in your best interest. So I think knowing more about this is essential.

Thankfully, Dan Ariely, a professor at Duke University, just wrote a book summarizing the latest research in this field (behavioral economics). His book, Predictably Irrational, is a must-read. You can get it at Amazon or any other bookseller.

The research: price affects athletic performance

Here is just one example of a study Dan did. It's pretty funny, if you ask me.

Dan's team stationed themselves at the university gym. They offered an energy drink to student exercisers. The drink claims to "elevate your game." To one group, they charged the regular price for the drink. To the other, the researchers marked the drink down to 1/3 of the regular price.

After the students exercised, the researchers asked the students if they felt more or less fatigued than they normally did after a workout.

Both groups of students said they felt less fatigued than normal.

But, get this. The students who drank the higher-priced version of the drink felt less fatigue than the group that paid 1/3 the price! This is a weird variation of the placebo effect.

The research: price affects mental performance

That exercise test was based on self-reporting.

So to validate the results, the researchers did the same thing in a different setting. They gave two groups of students anagram puzzles to solve. One group did the anagrams after drinking the full-priced energy drink, while the other group had drunk the discounted energy drink.

In this case, the group that drank the higher-priced drink (remember: it's the same drink!) scored 28% higher on the anagram tests. Isn't this crazy?

There is more to the study, but I don't feel right citing more of Dan's research. I recommend you read the book if you're interested.

What this means for you

The point is that it's not rational for a lower price on an identical product to lower the results of the product, but there is overwhelming evidence that it does. It is a predictably irrational behavior.

(Maybe we should quadruple the prices of all of our products so they work better?)

The mechanism here seems to be that the lower price affects "expectancy," which in turn reduces the placebo effect. Volumes could be written about the placebo effect, and the power of belief to create tangible results in performance and healing (both positive and negative).

The relationship between hypnosis and the placebo effect is even more interesting and open-ended. But let's end here for now.

Have a great weekend. Hopefully you'll get time to read Dan's material.

If you are interested in me interviewing Dan, let me know. I can probably arrange it.

signature - Michael Lovitch
Michael Lovitch
Co-Founder, The Hypnosis Network

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