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Purpose – A placebo effect is a (positive) change in health outcomes that is due to a (positive) change in beliefs about the value of a treatment. Placebo effects might be “behavioral,” in the sense that revised beliefs lead to behavioral changes or new actions that in turn yield changes in health outcomes. Placebo effects might also include a “physiological” component, which refers broadly to non-behavioral, brain-modulated mechanisms by which new beliefs cause changes in health outcomes. Nearly all formal economic models of human behavior are consistent with behavioral placebo effects, but strongly inconsistent with their physiological counterparts. The reason is that the latter effects can imply that expectations enter, rather than multiply, state-contingent preferences. It is therefore unfortunate that little evidence exists on physiological placebo effects. We report data from novel clinical experiments with caffeine that seek to provide such evidence.

Methods – Subjects visit the clinic on multiple occasions. On each visit they ingest either a placebo or caffeine pill. Subjects only know the probability with which the pill includes caffeine. We obtain physiological measurements prior to ingestion and at 30, 60, and 90min after ingestion. Importantly, we constrain subjects to remain seated and read pre-selected magazines during the interval between treatment and outcome measurement.

Findings – Our design provides particularly clean inference because it (i) eliminates the possibility of behavioral confounds; (ii) provides for measurements at the individual level; (iii) manipulates beliefs without deception; and (iv) uses salient rewards. We find evidence for the existence of physiological placebo effects mediated by expectations.

Implications – Our results are consistent with the possibility that the prefrontal cortex provides external, top-down control that modulates physiological outcomes, and make a case for the importance of research geared toward developing appropriate and tractable frameworks that accommodate non-linear relationships between expectations and preferences.

Marketers of beauty products capitalize on consumers’ perception of beauty to enact a price placebo effect through setting high prices to insinuate a superior performing product. Yet, in the context of growing alternative beauty movements emphasizing inner beauty and self-acceptance, little is known on how the effect of price on a product’s perceived effectiveness and satisfaction is bounded by different modes of beauty conceptualization (BC). Hence, this study aims to investigate how distinct perceptions of beauty impact the effectiveness-based and satisfaction-based price placebo effects in Muslim-majority markets such as Turkey compared to markets largely driven by Western values such as New Zealand.

This research is based on a quasi-experimental factorial design based on the manipulation of the level of price for a beauty product and the observation of the extent of BC. The sample included 144 participants from Turkey and 147 participants from New Zealand.

This research finds that the manipulation of the price (low vs high) equally activates the effectiveness-centered price placebo effect in both countries. When expectations are taken into account, the (satisfaction-based) price placebo effect is non-existent in New Zealand, while in Turkey the higher price leads to an opposite effect: a significant decrease in satisfaction. It is also found that the effect of price on effectiveness is moderated by BC. In both countries, the price placebo effect is activated only when consumers narrowly conceptualize beauty, while this effect does not hold for broad conceptualizers. The effect of BC on the price placebo appears to be stronger in New Zealand in comparison to Turkey.

Marketing managers’ awareness of different perceptions of beauty and how these may influence the price placebo effect in different cultures would allow them to decide what strategies are most appropriate for different groups of customers. For example, by pursuing the movement toward inner beauty and its broad conceptualization, high-end brands are likely to compromise opportunities to capitalize on the price placebo effect. On the other hand, this alternative perspective may cultivate profound satisfaction in the long-term.

The price placebo effect disappears when people conceptualize beauty from a broad (inner) perspective. This suggests that public policymakers, to counteract the negative effects of misleading marketing and to create fair exchanges, must promote broad BC in society.

This study contributes to the body of the existing research on price placebo by offering unique insights into the boundary conditions of the price placebo effect underscored by BC in two distinct cultural-religious settings. Also, it proposes two different variations of price placebo, namely, effectiveness-centered vs satisfaction-centered. From a methodological point of view, it is the first project in the Islamic marketing discipline that applies the Islamic perspective on causality.

Drawing on signaling theory, this paper aims to argue in favor of a “placebo outsourcing effect” (POE) consisting of a positive relationship between provider’s bluffing and customer satisfaction.

The authors applied prediction-oriented segmentation SEM on a dyadic sample of 171 outsourcing relationships.

The authors highlighted two segments that display a form of POE, representing about three-quarters of the customer-provider dyads. The first segment exhibits a positive relationship between the provider’s bluffing and customer satisfaction that is further strengthened by the provider’s reputation and customer’s operational capabilities, while for the other segment, the provider’s bluffing has positive interactions with both operational capabilities and outsourcing experience. These findings show that service providers have reached the bluffing proficiency that enables them to bluff customer firms with varying levels of operational capabilities and outsourcing experience by using the most appealing signals for every type of customer.

Based on the findings, the authors provided to customer firms extensive guidelines to avoid the POE by frustrating service provider’s bluffing proficiency.

This study’s originality resides in the amendment of the disconfirmation paradigm of satisfaction in the outsourcing context by introducing and testing the POE.

Proceeding from studies that, at a general level, identify the extrinsic price cue as a mediator between a wine's perceived and intrinsic merit, the authors aim to report on a tasting‐room experiment conducted to determine the impact of the price cue on sighted ratings across categories of gender, age, and relative experience.

A total of 73 subjects assessed seven merlot wines, first blind and then sighted. During the sighted tasting, the only available cue‐information was the price per bottle. The seven price points ranged from the cheap (R25) to the expensive (R160).

Across all segmentations, the authors' analysis of sighted scores revealed the marked extent to which price effects demean the intrinsic merit of a wine. Older, more experienced and female strata appear to respond the most to price information; their respective model price effects are shown to increase by 57, 33 and 24 percent relative to their base comparators.

These findings challenge the dogma that unbiased sighted assessments are best conducted by self‐proclaimed wine experts who are older and more experienced; and suggest alternately, and perhaps heretically, that such assessments would be better conducted by younger, less experienced, non‐experts.

Briefly reviews the standard Poisson distribution and then examines a set of derivative, modified Poisson distributions for testing hypotheses derived from positive deviation‐amplifying feedback models, which do not lend themselves to ordinary statistically based hypothesis testing. The “reinforcement” or “contagious” Poisson offers promise for a subset of such models, in particular those models with data in the form of rates (rather than magnitudes). The practical difficulty lies in distinguishing reinforcement effects from initial heterogeneity, since both can form negative binomial distributions, with look‐alike data. Illustrates these difficulties, and also opportunities, for various feedback models employing the self‐fulfilling prophecy, and especially for confidence loops, which incorporate particular self‐fulfilling prophecies as part of a larger dynamic process. Describes an actual methodology for testing hypotheses regarding confidence loops with the aid of a “reinforcement” Poisson distribution, as well as its place within sociocybernetics.

The purpose of this study is to investigate the relationship between tourism development and urban housing prices in Chinese cities. Specifically, the study aimed to explore whether there is a relationship between the two variables in tourist and non-tourist cities and whether there is a non-linear relationship between them.

In this study, the entropy method was used to construct the China City Tourism Development Index, which provides a more comprehensive measure of the level of tourism development in different cities. In total, 45 major cities in China were studied using the panel data approach for the period of 2011 to 2019.

The empirical analysis conducted for this study found that tourism development affects urban house prices, and that there is an inverted U-shaped relationship. However, this varies across cities, with house prices in tourist cities tending to be more influenced by tourism development than non-tourist cities. Also, foreign direct investment, population size, fixed asset investment and disposable income per capita were found to have an impact on house prices in both tourism and non-tourism cities.

There are significant differences in tourism development and urban house prices in different cities in China. This study considers these differences when examining the impact of tourism on house prices in 45 major cities in China by dividing the sample cities into tourist and non-tourist cities.

Nutrition, as a science, is poorly understood, both professionally and publicly. The confusion that surrounds this science makes it very difficult, if not impossible, to formulate public health policy, which creates opportunities for political manipulation and control. Nutrition, for a century or more, has been variously described as a summation of the physiological and biochemical properties of individual nutrients in food rather than the whole food itself. This infers that isolated nutrients in supplements will function in the same way as nutrients in food. It also infers that removing or minimizing “undesirable” nutrients from food will make the food more healthful. This arises from the highly reductionist way that we focus on individual nutrients minus their natural context, both the context within the foods of which they are a part and the context within biological systems where they function. The shortcomings of this belief system may be illustrated by hugely costly mistakes made in the past, even more than a century ago, that corrupt current practices. Such mistakes have become so embedded in the contemporary narrative on nutritional science, both fundamentally and practically, that we fail to recognize the damage they continue to cause.

Alternatively, when nutritional effects are considered more within their natural contexts, that is, more wholistically, then it helps to explain, for example, the remarkable ability of nutrition, as provided by a whole food plant-based diet, to prevent even to cure varied types of cardiovascular disease. Furthermore, the breadth of this nutritional effect for a wide variety of illnesses and diseases suggests that nutrition, properly provided by a whole food plant-based diet, is more efficacious than a combination of all the contemporary pills and procedures combined. It also suggests that genetic determinism is not the explanation for disease that is widely advanced. And finally, among still more consequences, there are many societal outcomes that can be substantially mitigated, including the escalating cost of health care and the dangerously increasing array of destructive practices that damage the environment. Many of the momentous health, economic, environmental and sociopolitical problems currently faced may be traced to a misunderstanding of the effects of food and nutrition. The task therefore is how to bring this message to the attention of a public who for too long have gradually adopted flawed food production and healthcare systems that are on the verge of collapse, threatening the collapse of entire societies as we know them. More specifically, a public and professional dialog on the meaning of nutrition, especially its wholistic properties, is desperately needed, especially in medical schools where nutrition as a science is almost totally ignored.

The purpose of this paper is to illustrate how associationism mistakenly assumes that direct experience is possible; that is, there is expectation-free observation and association without prior expectation. Thus, associationism assumes that learning involves the absorption of information from the environment itself. However, contrary arguments take the position that, for an individual to make a connection between his/her behaviour and its consequence(s), he/she must first have an expectation in order for a connection to be made.

This paper uses a personal experience to illustrate how implicit assumptions and unstated expectations can be found in the corporate world. It offers to answer questions that will lead to an examination of overcoming irrationality through utilization of the Popperian philosophy of associationism.

When evaluating a practice, it is easier to find evidence of some sort to support the practice, especially if we are either disposed to do so or if our colleagues and organizations have recommended that we adopt these practices. However, if we are committed to genuinely improving our practice, Swann (2009) suggests that we become critical and ask, “What are the unintended and undesirable consequences of doing things this way?” (p. 8).

Popper’s approach needs to be developed or learned through stages and with time. We need to be aware that it takes time to master the use of this approach. Merely introducing or having organizations learn the different methods or short cuts have only a limited effect in improving their ability to deal with issues in different contexts.

The examples used throughout this paper illustrate that the adoption of Popper’s approach does not necessarily require large-scale experiments. In fact, a well-conducted case study can be effective in casting doubt on existing assumptions. Regardless of the nature of the research strategy and the scale of the experiment devised to test a hypothesis, the task of testing can and will be problematic.

Expectations can make us look foolish from time to time, but they can also be very powerful or useful because they are more than mere anticipation. If we are unable to strip away our preconceptions or prior knowledge, we can at least acknowledge our biases and, in doing so, we may not continue to be trapped within our own perspectives, which can blind us to the truth.

The examples used in this paper illustrate that Popper’s approach is robust and applicable in a variety of contexts and is not limited to educational organizations. Furthermore, it showcases our irrationality, and helps us understand when and where we may make erroneous decisions.

The paper aims to estimate the capacity of supreme audit institutions’ (SAIs) audits to deter potentially wasteful year-end procurement spending. It also studies heterogeneous responses to SAIs’ audits depending on whether agencies’ top managers are appointed through a competitive procedure or not.

A letter signed by the head of Chile’s SAI was sent to a hundred randomly chosen agencies two weeks before the end of the fiscal year, with instructions on year-end spending accounting and an audit threat. In addition, a hundred agencies that did not receive the letter were used as a control group.

Agencies that received the letter reduced year-end aggregate procurement spending by 33% relative to controls. Purchases of office supplies, safety equipment, personal care products and paper products experienced the most considerable reductions. The decrease in year-end spending was smaller for agencies with at least one top manager appointed through a competitive procedure.

A SAI’s audit threat significantly reduced year-end procurement spending. Larger reductions in agencies headed by political appointees and across categories of goods that have been flagged as likely to be purchased to exhaust the budget suggest the avoided expenditures would have been wasteful. Further research is needed to determine if the net social value of year-end procurement spending deterred by SAIs audits is negative as suggested.

This paper has implications for the institutional support of SAIs audits and civil service.

This paper provides novel experimental evidence of SAIs’ audits’ deterrence power on public agencies’ year-end procurement spending.