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Placebo effects of marketing actions. How prior experience modulates the effect of price on expectations about product efficacy (Placebo)
Start date: Apr 1, 2011, End date: Mar 31, 2013 PROJECT  FINISHED 

In this research project, the critical role of price in shaping expectancies about product efficacy (i.e., placebo effect of marketing actions) is investigated. While it has been demonstrated that a high versus low price may considerably affect subjective experiences (such as e.g., taste), it has only recently been demonstrated that price can affect actual product efficacy. As individuals may learn about product quality through prior experience, they may update price-quality beliefs accordingly. Hence, the question arises to what extent prior product experience affects placebo effects of marketing actions. In this research proposal, four competing theoretical accounts will be empirically tested to investigate how prior experience with a product may modulate the extent to which price affects product efficacy. The theoretical and practical implications of this research project for marketing scholars and practitioners, the medical field and public policy makers are discussed.
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