You walk into the drugstore. You see two comparable national brands of aspirin positioned next to each other on the shelf. One happens to be on sale for 25 percent off the regular price. You go ahead and buy it—but maybe you shouldn’t. The fact that it is discounted might actually make it work less well for you.

This scenario is actually quite plausible, according to recent research by Baba Shiv, associate professor of marketing at the Business School. Among other things, Shiv’s research found that marketing actions, such as pricing and advertising, can actually alter the efficacy of products.

“Price can have strong behavioral effects,” said Shiv, who co-wrote the paper with Ziv Carmon, an associate professor of marketing with INSEAD business school in Fontainebleau, France, and Dan Ariely, a professor of marketing science at MIT.

It has long been known that consumers’ beliefs and expectations influence their judgment of products and services. For example, consumers often judge lower-priced items to be of lower quality. Consumers’ beliefs also can affect their subjective experiences. In one well-known study, beer was rated as better tasting when it had a favorite brand’s label than when it was unlabeled. What makes this new study different from previous research is that it shows marketing actions can affect more than just judgments and subjective consumption experiences—going so far as to change actual consumer behavior.

“We have these general beliefs about the world—for example, that cheaper products are of lower quality—and they translate into specific expectations about specific products,” said Shiv. “Then, once these expectations are activated, they translate into self-fulfilling prophecies that actually impact our behavior.”

Get the full story at the Stanford Graduate School of Business