According to the Register, scientists are making good progress on understanding the placebo effect.
When subjects suffering from some pain were told they would receive painkillers, the parts of the brain that produce our bodies' natural painkillers, the mu-opioid receptors, kicked up a storm. This happened whether the subjects were actually given painkillers or instead given a placebo.
The brain activity was proportional to the expectations the subjects had about how effective the painkillers would be. The researchers say this is the first direct evidence that endorphins can help explain how the placebo effect works.
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