The Effect of a Placebo-based Policy

(Disclaimer: I don’t actually know that much about medical ethics or public policy, so I welcome all comments to educate me on the issues here. Also, I will miss citing things because I’m a lazy blogger, so I recommend that if you’re interested, you do your own research)

The Placebo Effect is a well-known phenomenon where a patient actually improves even when given a non-effective treatment that  he or she believes is effective. The perception of efficacy alone not only makes the patient feel better, but actually makes them better.

This effect manifests in other, similar manners, where the perception overrides the actual sensation. For example, it turns out that people will enjoy (and report as enjoying) wine more if it is marked as being more expensive, independent of the actual wine itself. Though maybe if you’re a hipster cheapskate like me, you might perceive cheaper as being better, like a hole-in-the-wall Chinese restaurant.

In both of these cases, the subject is being tricked into something, but the effect on them is real. Given that, the big question I have is: do you think it’s ethical for doctors, marketers, and other professionals to use the Placebo effect?

Big Yak Mountain, the book club I am in, just read Dan Ariely’s Predictably Irrational. Ariely is a behavioral economist at Duke, and in this book, he describes several quirks about human decision-making that show how irrational we are. He discusses how uncertain we are in valuing things, to the point where we don’t even know whether we should pay or be paid for some experience. He talks about the gulf between free versus really cheap. He explains why I would happily help you move a couch out of the goodness of my heart but would be unwilling to do it if you offered me $5. Overall, he covers roughly 15 different topics, one per chapter, in an accessible manner. Although I think that Thinking, Fast and Slow is still better, I can understand why you might want to save yourself a few hundred pages and explanation of experimental methods.

When I was putting together notes for the discussion, the question I kept coming back to was, “Is it okay that we’re so irrational, or shoulwe be more rational, more economically logical, in reasoning?” From our discussion, we roughly agreed that these phenomenon are fascinating and good to know, but we were also completely satisfied to experience our blissful irrationality as it is. The bigger question, however, is how this should impact policy, and this is where I am going to do the very bad thing of generalizing narrow experimental results into my worldview.

I asked one policy question above, and I have a few more for you along the same lines. Here’s an easy one: should the use of “free” in advertising campaigns be regulated? I think most of us would say no, despite the fact that we’re totally irrational about free and will go way out of our way to get a free bagel to a degree far beyond that of a 1 cent bagel, even if the free bagel is just a way to lure us into a store to make a large purchase.

Here’s a more contentious one. Ariely spends a chapter on how irrational we are when aroused. If you’re unfamiliar with the study, I’ll save the joy of the experimental methods for when you read the book, but the result is that we act less rationally when emotionally aroused. Since people can be emotionally aroused by anger, one policy is a “cooling off” period between the purchase and acquisition of a gun to prevent people from doing something rash. What do you think of cooling off periods?

The last one is quite broad, but a big issue today is government surveillance. It appears that the NSA has been spying on just about everyone to a much greater degree than we thought. I’m a trusting guy and believe that this was done for our own good and not because someone is reading my phone meta-data to hurt me. If we momentarily ignore the ethics of the surveillance itself, we have been deceived about the activity itself. This deception sounds a lot like the Placebo effect, where an authority gave the perception of something to make us feel better and improve our situation, though they were technically lying at the time. Given my biased framing, how do you feel about the government deceiving us about surveillance for our benefit?

I haven’t quite worked through the details and nuances of this, and specific issues deserve more thought, but I personally am pretty liberal (socially and economically), and I think my belief in human irrationality (and by inclusion, the placebo effect) plays a big role in that. Simply, I, like most other people in this country, am just one person who can’t adequately grasp what is ultimately good for me, and to some degree, I need someone (and not just market forces) to be watching my back.

I need financial regulations because I have no idea what the banks are doing. I need environmental regulations because I don’t know what every supplier is doing. And even if I could, I couldn’t resist buying the cheaper detergent to make optimal purchases. I believe in universal health care because choice is good, but it’s a lot ask every individual to know how best to keep themselves healthy. And assuming that Congress is well-informed (which apparently has not been true so far), I’m generally pretty okay with government surveillance because there are things that I’m better off not knowing, and I trust an entity with the goal of protecting me more than businesses with the goal of being profitable.

So my wildly extrapolated beliefs based in science suggest that a stronger hand in policy is good for us. Of course, there’s always the looming threat of totalitarianism, but a healthy debate and oversight from our legislature should keep it in check. At least in contrast to current trends in libertarianism and small government, I would like to see government stay involved. Some people believe that they deserve complete transparency, that markets are self-correcting, that government should be limited, and that individuals should have tremendous personal freedom. I definitely believe in personal freedom on social issues where it’s more obvious (to me) how freedom affect one’s happiness. On the other issues, my understanding of human cognition is that given complete information and choice, people can still be quite bad at ultimately making themselves happy. And I think that public policy has that mandate as well.

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