Brands Status and Reverse Placebo Effects: High Status Products Inhibit Performance Despite Being Preferred

Placebo treatments have been shown to influence medication efficacy, but recently, researchers have investigated placebo effects of marketing actions. For instance, pens and wines whose labels bear a prestigious name may be experienced as superior (Park et al 2010; Wansik et al 2007), and higher-priced items have been shown to increase performance (Shiv, Carmon, Ariely 2005a, 2005b). We extend this literature by investigating the impact of brand status on performance. Despite consumers’ preferences for “better” brands, we demonstrate that the use of high status products may result in lower performance, even though people judge them as higher in quality and are willing to pay more for them. Why might a higher status product result in lower performance? People tend to form expectancies about their own abilities after comparing themselves to other users, and this may have implications for their subsequent performance when using high status products (Escalas and Bettman 2005; Festinger 1954). We posit that, in the case of a high status brand, this leads to a higher perceived performance standard but greater accessibility of the differences in the performance expectancies of one’s self versus this reference group (Mussweiler 2001). When these malleable performance expectancies lead to an unfavorable comparison to that standard, we expect to observe contrast effects that lead to lower performance when using higher status products. This perspective is consistent with past research on placebo effects that show that expectancies and conditioning affect performance (Kellogg and Barron 1975; Storms and Nisbett 1970; Beecher 1946). We present a process that incorporates the influence of status, and show how it increases perceived standards and feelings of intimidation.