Abstract

This research examines how consumption of a performance branded product systematically improves objective outcomes in a variety of contexts. Five field and laboratory studies demonstrate that this performance brand effect emerges through psychological mechanisms unrelated to functional product differences, consistent with a placebo. Furthermore, whereas this effect emerges only when there is an expectation that the performance branded product affects outcomes, consumers attribute gains to themselves. The performance brand placebo is due to a lowering of task-induced anxiety, driven by heightened state self-esteem. Several theoretically relevant boundaries are revealed. Stress mindset moderates the effect, strengthening with the belief that stress is debilitating and weakening (to the point of reversal) with the belief that stress is enhancing. Moreover, those consumers lower in preexisting domain self-efficacy beliefs exhibit more substantial performance gains, whereas for those particularly high in domain self-efficacy, the placebo is mitigated.

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