Economic Wisdom to Apply in Your Twenties

Chapter 11

Chapter 1 Section 4 Are Imported Drugs Better?price bias

You may be thinking like this:

A 4-yuan sofa is more comfortable than a 000-yuan sofa.

Limited-edition jeans from well-known designers are sure to be better sewn and more comfortable than the stock Walmart stock.

High-end soymilk machines are definitely easier to use than low-end ones.

The roast duck at Quanjude for 15 or [-] yuan is definitely much more delicious than the roast duck at Wanglaowu Noodle Shop for [-] yuan.

……

These are just innocuous consumer experiences, but they extend to medical behaviors that are closely related to life, aging, illness and death. Do you also believe that more expensive medicines will have better effects on the body?
Is it really?Cheap painkillers don't work, but high-priced ones do it right away?When I have a cold, the cold medicine bought at the cheap pharmacy is not good, but the expensive prescription medicine prescribed by the doctor is really much better?Ordinary medicines are not effective for the grandmother who suffers from asthma. Will the new medicine just launched by a famous manufacturer be able to cure the disease?
In other words, are medicines the same as sofas, jeans, and roast duck? Can we conclude that high price equals high quality, and can our expectations be directly converted into the objective efficacy of the product?
The truth is, you can wear cheap jeans or settle for a less expensive sofa.But when it comes to your health, can you still bargain?Putting aside the common cold for now, how many people will still be penny-pinching when life is at stake?We always want to do our best to relieve pain for ourselves and our families, even with the most expensive and best medicine.

Economists, however, are less sentimental.They will definitely ask, must the most expensive medicine be the best?
Dan Ariely, a famous behavioral economist in the United States, once conducted such an experiment. He packaged ordinary vitamin C capsules into "viladoni" special medicine that can effectively eliminate the pain of electric shock, and marked it at $2.50.Almost all the participants in the experiment claimed that "viladoni" can effectively reduce pain.But when the drug's list price was changed to a 10-cent discount, that was only half the case.

This is actually what economics calls a "price bias".Dan Ariely and others also found that the relationship between price and placebo efficacy varies from person to person.Those who suffer from pain have a particularly strong appreciation for the link between price and placebo.In other words, the more people suffer from pain, the more they rely on pain medication, and the stronger the association: the lower the price, the less they feel benefited.

The fact that we discounted the price, are we doomed to get something worse?If we rely on our irrational intuitions, this is actually the case.If we see a half-price item, we instinctively judge it to be worse than full-price—in fact, when we look at it badly, it really is.

Price bias effectively drives the efficacy of placebos, pain relievers, and energy drinks for placebo treatments.It may seem like a hoax, but it really works in our healing process.Maybe every doctor doesn't like such "quack scams" like quack doctors and witch doctor swindlers, but if it is scientifically proven to be effective, will doctors have to reconsider their professional conscience?

As rational consumers, we should pay attention to identifying price bias, whether in the face of medical treatment or daily consumption.If we settle down and compare products and prices rationally, we can overcome the unconscious urge to link the selling price of a product with its intrinsic quality.

Wisdom Pieces: Be wary of the phenomenon that the more expensive the better

"The more expensive medicinal materials are not the better:" relevant experts believe that "autumn and winter tonics are not the more the better, nor does it depend on how expensive the medicinal materials are, but it depends on the individual." Experts further explained that TCM physique will Human constitutions are divided into 9 different constitutions, including peaceful constitution, qi-deficiency constitution, and yin-deficiency constitution. The key to tonic is to find the medicinal materials and tonic methods that are most suitable for your constitution, instead of inferring the efficacy of medicines based on the price of medicines, sometimes two or three hundred Yuan's commonly used medicinal materials can be used for conditioning for a winter.

"Use new and expensive drugs with caution": When using antibacterial drugs, many people still have such a misunderstanding, thinking that the more expensive the drug, the newer the drug, the better it can cure the disease.Experts pointed out that the development cost of new drugs is high, the cost of publicity is also high, and the price is usually more expensive than old drugs.The price is not the factor that determines the efficacy of the medicine. Expensive medicine may not be suitable for you. Symptomatic medicine is the most important thing.

"Buying a blood glucose meter is not as expensive as possible": For diabetic patients, it is essential to use a blood glucose meter to monitor blood sugar daily, and choosing a suitable blood glucose meter plays an important role in controlling the disease.Experts pointed out that buying a blood glucose meter is not the most expensive or the best. Patients should understand the characteristics of various blood glucose meters and choose according to their needs.For example, if you want to be more convenient, you can choose a blood glucose meter that can automatically adjust the code and perform continuous testing; the elderly can choose a wider test strip.

(End of this chapter)