A funny thing happens when you lie to people: they tend to believe. Why shouldn’t they? They lie to themselves all the time. Our minds are wired to respond in predictable ways–among them is perceiving the world the way we want to see it, not necessarily the way it is.
Perhaps no other phenomenon demonstrates our brain’s ability to make believe better than the placebo effect. Long known for its ability to improve a patient’s health, the practice of giving people an inert treatment they believe will make them better has been proven to be highly effective. In fact, in recent studies, researchers have found the placebo effect may be much more potent than previously thought. So strong is the expectation that a pill will provide relief, that even patients who are told beforehand that the medication is a placebo and has no medicinal properties, still show significant signs of improvement. When it comes to fooling ourselves, the brain can’t help itself.
How a sugar pill could be as effective as an FDA-approved drug, backed by millions of dollars in research, is a central mystery of the placebo effect. But the brain’s predilection to fool itself is not only evident in the medical field. The cognitive trick is a central trait of how the products we use every day become part of our lives.
Habits are good for business. In fact, many industries could not survive without them. The incentive systems and business models of the companies that make habit-forming products require someone gets hooked. Without consumer habits, these enterprises would go bust.
Nir’s Note: In this guest post, Ryan Hoover, Director of Product at PlayHaven, utilizes my thinking on the “Habit Zone” to shed light on where Turntable.fm fell short. Ryan blogs at 
Nir’s Note: This guest post is by Francesca Gino, an associate professor of Business Administration at Harvard Business School 
