Monday, March 17, 2008

Eliot Spitzer and the Price-Placebo Effect -

Really, this has finance implications.

Shankar Vedantam - Eliot Spitzer and the Price-Placebo Effect - "
Spitzer's poor moral, political and legal judgment is beyond question, but on the delicate question of whether Kristen was 'worth it,' a host of unusual studies suggest the governor probably got his money's worth. The question, as it turns out, has little to do with either Kristen or prostitution, and nearly everything to do with Spitzer himself.

Specifically, an area of Spitzer's brain known as the medial orbitofrontal cortex.

This part of the brain makes judgments about pleasure, and intriguing new research has found that the price people pay for something can subtly and unconsciously change how much pleasure they derive from it. The medial orbitofrontal cortex research suggests that, contrary to conventional wisdom, people who buy something at a discount may unconsciously derive less satisfaction than people who pay full price, or a premium, for the very same thing.
Which is similar to the finding on wine we saw earlier this semester.

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