The Fine Pleasures of Paying Through the Nose

Research from America's best business schools.

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Peer pressure keeps influencing us even when we're well past schooling years. If everyone is telling you that something is good, you're probably going to agree—or at least that's what your brain will try to think. And for adults, one of the best measures of what their peers like can be found on price tags. Some researchers at the Stanford Graduate School of Business decided to test just how much the luxurious feeling that comes with using a high-priced good determines the enjoyment of that good.

Eleven Caltech graduate students were asked to sample and rate what they were told were five different wines. In reality, there were only three wines, each with a fake price tag—a $5 wine labeled $45, for example. In Marketing Actions Can Modulate Neural Representations of Experienced Pleasantness, published in January in the Proceedings of the National Academy of Sciences, the results show that those fake prices carried a lot of weight: The participants thought they tasted five different wines, and the more "expensive" the wine, the more they liked it. And they weren't just lying to themselves: The researchers tested parts of the participants' brains and found that when sipping a purportedly higher-priced wine, there was more activity in the parts that experience pleasure.