Check out this post from Dan Ariely. He describes an experiment to test the placebo effect of painkillers. Tell someone you’re giving them a painkiller even if it’s just a placebo, and it tends to work. Dan explains how:

When we expect to get pain relief, our brain secretes a substance that is very much like morphine and this substance makes the pain go away.

Dan’s experiment adds an economic twist:

In this study we showed that when people get more expensive painkillers (placebos in our case) they expect a lot and get a lot of pain relief, but when the price of these pills is discounted, the expectations are lowered and so is their efficacy.

So somehow, the thing in the brain that secretes the painkilling substance is linked to your economic logic circuits, which tell you that more expensive things are usually better. I wonder how this works exactly. Is it that we expect the effect to be better, so we interpret the amount of stuff that our brain secretes in a different way? Or does is more painkilling stuff actually secreted?