Why your $15,000 LV may be a great idea
How to harness the power of the Placebo Effect for greater success
Recently, I came across an interesting idea in a book: Alchemy: The Surprising Power of Ideas That Don’t Make Sense by Rory Sutherland. Sutherland explored the idea of the strange effects of Placebos, like how expensive painkillers are more effective than cheaper ones. The book discusses in detail the use of Placebos in marketing and psychology, and I highly recommend it.
I was especially interested in the psychology of placebos. Having explored and written about “positive” mindset, I suspect the Placebo Effect has a lot to do with how we think instead of the actual “sugar pill”.
In this piece, I would like to share what I believe could be an effective strategy for us to harness the Placebo Effect and improve various aspects of our lives.
The Classic Placebo Effect
In medicine, placebos are often used in clinical trials to test the efficacy of new drugs. However, the Placebo Effect itself, where a patient experiences real improvement despite receiving an inactive treatment, highlights the power of belief and expectation.
In the paper “Commercial Features of Placebo and Therapeutic Efficacy” (2008), published in the Journal of the American Medical Association (JAMA) by Waber et al., 82 healthy participants were subjected to a series of electric shocks to induce pain. Half of the participants were given a pill that cost $2.50 per dose, while the other half received a pill that cost $0.10 per dose.
Participants who believed they were taking the more expensive pill reported significantly greater pain relief than those who believed they were taking the cheaper pill.
Brain scans (fMRI) revealed that the “expensive” placebo elicited greater activity in areas of the brain associated with pain relief. The study demonstrated that the perception of pain can amplify the Placebo Effect, resulting in actual, measurable changes in pain perception and brain activity.
I find this interesting. Participants who were told that the pill they were taking was more expensive experienced greater pain relief than those who were told it was cheaper, even though both groups received the same placebo. This suggests that the Placebo Effect can be modulated by non-pharmacological factors, such as price, which influence patients’ expectations about treatment efficacy.
Why your LV Bag is an expensive placebo
For all practical purposes, a $30 bag from the night markets of Bangkok does the same thing as a $15,000 LV bag from Milan. So why would anyone consider buying an LV? There is something that only the LV can do.
It can change who you are.
I couldn’t understand why some of the most successful salespeople I used to work with would spend so much money on these luxuries. How can someone who is so careless with money yet be so successful at the same time? These salespeople consistently earn more than the average person in Singapore.
When I asked them, they said they need it. It was not because they were successful that they splurged, but because they needed it to be successful.
The Power of Belief
There is a classic folklore called “The Magic Brooch.” The story, in various versions and in different cultures, goes something like this:
A young woman dreams of attending the royal ball and believes that a magic brooch will make her the most beautiful girl there. She spends all her money to buy the brooch and, feeling confident in her appearance, goes to the ball.
As she dances, everyone is captivated by her beauty, grace, and charm. She assumes it’s because of the brooch. However, unknown to her, she had dropped the brooch earlier in the evening.
When she discovers its loss, she is shocked but then realises that it was not the brooch that made her beautiful, but her own natural grace, which comes from the confidence of knowing she had the brooch.
This is akin to the LV bag or Hugo Boss suit. Or when you step into an Aston Martin. It changes you. You walk taller, feel more confident, and become a different person.
In psychology, the Placebo Effect is closely tied to the concept of self-fulfilling prophecies. If you believe you’ll succeed, even if it is because of these inconsequential items, you’re more likely to take actions that lead to success. You will behave differently. Think and act differently. Speak differently.
The Growth Mindset
In education and business, the Placebo Effect is often linked to the concept of the ‘growth mindset.’ Students and professionals who believe they are smarter tend to perform better than those who don’t.
The term “growth mindset” was coined by psychologist Carol Dweck in her book Mindset: The New Psychology of Success. It refers to the belief that abilities, intelligence, and talents can be developed through effort, learning, and persistence. This contrasts with a fixed mindset, where people believe their abilities are static and unchangeable.
You can, if you think you can.
This mindset often leads to greater resilience, motivation, and ultimately, better performance.
I believe there are logical explanations for this. What may be seen as arrogance may be a way of hacking into our personal psychology. People with growth mindsets often view challenges as opportunities to grow and learn, rather than obstacles that threaten their intelligence or abilities. That failure is a part of the learning process and not a reflection of who they are.
Therefore, they try harder and put in more effort. They also tend not to take criticism personally.
Sometimes, this may involve a ritual (think Feng Shui) or a lucky charm. Praying to a god, engaging in intensive self-talk, or purchasing an LV bag. These are tools to help them stay on the path towards greater success.
So now that you know, can you still fool yourself?
For a placebo to work, you have to believe in it. But if you know it’s a placebo, how can you still believe in it? Does it mean the placebo effect only works on others, not on yourself?
Not necessarily. There’s a way to hack it.
The Self-Aware Placebo
You would think that knowing something is a placebo would ruin its effect. But research shows that placebos can still work even if you know they’re placebos.
In a 2016 study published in Pain, researchers tested open-label placebos on patients with chronic lower back pain. The results were interesting.
Patients who took open-label placebos (meaning patients know they are receiving a placebo) reported a 30% reduction in pain and a 29% reduction in disability, even though they knew the pills were inert. The study suggests that open-label placebos could be a safe and effective addition to pain management strategies.
How is that possible? It seems that belief isn’t always logical. Your brain can hold two ideas at once: ‘This is just a placebo’ and ‘This might help me.’ The unconscious mind processes emotions and sensory information quickly, often without conscious awareness. This means it can also react to imagined scenarios as if they were real.
The Role of Rituals
Consider the lucky charm: when you are carrying it, you’re not telling yourself, ‘This will bring me luck.’ Instead, you’re creating a positive association. The lucky charm reminds you of past victories, and that memory and emotion boost your confidence.
It’s not fooling yourself but creating a mental shortcut to a positive mindset. Your brain doesn’t need to believe in magic; it just needs to feel good about it.
The Power of Suggestion and Visualisation
Muhammad Ali’s self-talk before boxing matches is a famous example of the power of suggestion, self-affirmation, and psychological priming. He would spend hours in front of the bathroom mirror saying to himself, “You are the greatest! You are the best!”
It’s a kind of mental warfare.
For Ali, it was an essential ritual before every match. Top athletes and business people also spend hours visualising their victories, closing the sale, or crossing the finishing line.
Visualisation works because the brain often can’t distinguish between actual experiences and vividly imagined ones. When you visualise success, your brain activates the same neural pathways as it would during the actual performance.
This is a kind of self-suggestion, where you “trick” your brain into believing the imagined scenario is real, priming your mind and body for success.
When you tell yourself, ‘This will help me win,’ you’re planting a seed in your subconscious. Even if part of you knows it’s just a ritual, the suggestion takes root.
By vividly imagining victory and optimal performance, athletes (and anyone else) can build confidence, reduce anxiety, and improve their skills.
The science behind visualisation shows that the brain responds to these mental images as if they were real, making it a valuable tool for achieving goals and overcoming challenges.
How to Use Placebos on Yourself
So, can you use placebos to your advantage, even if you know they’re placebos? Apparently so.
Lean Into the Ritual
“If my mind can conceive it, and my heart can believe it, then I can achieve it.”
–Muhammad Ali.
We all thrive on rituals. They provide a sense of control and structure in an unpredictable world. When you create a pre-performance ritual, whether it’s meditation, self-talk, or simply having your morning coffee, you condition your brain to associate that action with a desired state (e.g., focus, confidence, getting started).
Even if you know the ritual itself doesn’t have special powers, your subconscious responds to it as if it does. The key is to commit fully to the ritual and go through the motions with intention, as if you’re activating a special “mode” for yourself.
Focus on the Feeling, Not the Logic
Instead of questioning whether a placebo works, focus on how it makes you feel. If putting on an expensive suit makes you feel powerful and confident, that’s good. If a particular seat in your workspace makes you feel more productive, then go with it. And if you think visiting the temple or church before a major project will bring blessings and good luck, do so.
This aligns with the idea that our physical experiences have a significant influence on our mental state. Wearing a “power outfit” can make you feel more assertive. Smiling can boost your mood. Standing tall can make you feel more confident and assertive. Your brain reacts to these bodily cues, even if you logically know they’re symbolic.
Use Positive Self-Talk
Even partial belief can trigger the placebo effect. You don’t need to convince yourself fully; just entertaining the possibility can be enough to prime your brain for better performance.
This is how affirmations work: saying “I am confident” may feel fake initially, but repeated exposure helps your subconscious mind rewire itself until it feels genuine. And that’s when the placebo effect kicks in.
Combine with Real Effort
Placebos don’t work in isolation, and you still need effort and action to achieve results. The lucky pen won’t make you a skilled writer, but if it helps you write, that’s a powerful effect.
Therefore, routines, rituals, and self-talk matter because they help you take that first step when resistance kicks in.
The Mind Believes What You Feed It
Can you consciously make yourself believe in a placebo? Maybe not completely, but that’s not the point. The placebo effect isn’t about deception; it’s about harnessing positive associations, embracing rituals, and being receptive to the power of suggestion.
Whether it’s a lucky charm, a quirky routine, or self-talk into your mirror, placebos serve as catalysts for confidence and performance. At the core of all of this is a simple truth: your brain reacts to what you tell it.
If something helps you feel stronger, more focused, or more confident, why not go for it?
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