What causes the placebo effect?

Via Marginal Revolution, results of a fascinating study into what causes the placebo effect when it comes to wine.

When consumers taste cheap wine and rate it highly because they believe it is expensive, is it because prejudice has blinded them to the actual taste, or has prejudice actually changed their brain function, causing them to experience the cheap wine in the same physical way as the expensive wine? Research in the Journal of Marketing Research has shown that preconceived beliefs may create a placebo effect so strong that the actual chemistry of the brain changes.

The next time you open a bottle to serve your diner guests, tell them it's more expensive than it actually is. It's a free way to boost their enjoyment!

Some people may be more susceptible to the placebo effect than others, though research is very sparse.