Chapter 4, Section 3, Exercise 103 Price and Marketing How influenced are consumers by price and marketing? If something costs more, do our expectations lead us to believe it is better? Because expectations play such a large role in reality, can a product that costs more (but is in reality identical) actually be more effective? Baba Shiv, a neuroeconomist at Stanford, conducted a study1 involving 204 undergraduates. In the study, all students consumed a popular energy drink which claims on its packaging to increase mental acuity. The students were then asked to solve a series of puzzles. The students were charged either regular price ($1.89) for the drink or a discount price ($0.89). The student receiving the discount price were told that they were able to buy the drink at a discount since the drinks had been purchased in bulk. The authors of the study describe the result: "the number of puzzles solved was lower in the reduced-price condition (M = 4.2) than in the regular-price condition (M = 5.8)...p