To demonstrate the power of suggestion and price, Ariely and his colleagues set up a fake testing facility. They asked different groups to undergo a series of electric shocks. The groups then took a pain reliever called Veladone-RX and got the shocks again. Some participants were told the pills cost $2.50 each. Others were told they cost just 10 cents each. Result: Almost all the subjects reported pain relief from the pills that cost $2.50. Only half of those taking the 10-cent pills felt better. The kicker: The pills were vitamin C tablets.

To show how marketers manipulate us with the "free" option, Ariely offered people the choice of a high-quality Lindt chocolate truffle for 15 cents or a plain-Jane Hershey's Kiss for one cent. At that price, 73 percent chose the truffle and 27 percent went for the Kiss. But when the price was dropped to 14 cents per truffle and the Kisses were marked as free, 69 percent of the subjects took the Kiss instead of the truffle -- even though the price gap between the two candies was still the same, 14 cents. As Ariely notes, the temptation of getting something for free can overwhelm logic.

To measure how expectations shape our perceptions, hundreds of students did a taste test of two unidentified beers, one of which contained several drops of balsamic vinegar. The majority of the students who were not told about the secret ingredient said the vinegar-tainted beer tasted best. Students who were told in advance about the vinegar wrinkled their noses and picked the other beer.