Thought Experiment – Honest Deception

I had this idea about a decade ago, and actually seriously considered it for a while. Even though I’ve long abandoned it, it is quite interesting as a thought experiment as it exists in a moral grey space.


I have been fascinated with placebos. It is explicitly designed to be ineffectual for the condition in question, yet it often induces an effect psychologically. Although the “Placebo Effect” is likely really due to the medical intervention and interaction, “Intervention Effect” just doesn’t sound as good. It is by nature deceptive, which is usually acceptable in a controlled trial; but in a real life doctor-patient relationship, it is difficult to get informed consent without sounding like a quack (except perhaps in this weird study).

I will share an anecdote about an ENT physician I know well. He owns and operates a clinic in a relatively rural area in East Asia. The clinic is extremely popular, with 300+ patients per day during cold and flu “high season”. As your incredulity sets in, the clinic record is over 500 patients/day (yes, for a single physician). This was decades ago, when clinics had their own pharmacies. There were several keys to success. One was managing expectations. For patients that came in after other doctors “failed” to rid them of their cold, he would tell them they would get better in a few days, and sure enough they would (duh). If the person just caught the cold, he would say it was more serious and wouldn’t be over for 10-14 days. The important part is that he would always give the patients a good dose of pills and capsules, which turn out to be mostly vitamins. According to his “market research”, the locals perceived the efficacy of the pills based on size (larger is better), color (more colorful the better, bonus points for two-toned capsules), shape (round is boring), and quantity. The pharmacy would already have cartons of individual combo packages of many large, colorful, shaped pills, which would be conveniently prescribed as “A” or “B” to save time. Not all placebos are created equal; back in those days, placebo discrimination was rampant.

Nowadays it is ethically questionable for placebos to enter a doctor-patient relationship, for obvious reasons.

Thought Experiment

Here is the thought experiment. It is difficult for a physician to take advantage of the placebo effect. Is it possible for a company to ethically sell placebos to the general public?

Currently there are already companies that sell pills with no active ingredients, but those pills are actually marketed as medicine. I consider those to be double placebos, with the giver and taker of the pill both receiving the placebo effect.

Imagine a company Obecalp Inc. It makes its pills and capsules, which contain no active ingredients, at FDA-approved GMP facilities. Aside from providing the medical field with placebos, it also has a consumer arm that sells to the general public. The consumer market is mainly for relatives of terminally or chronically ill patients with subjective symptoms such as pain.

The company provides full disclosure on its ingredients (or lack thereof). It also provides relevant literature and a summary of the latest research. Customers are explicitly told to expect that the pill will likely do nothing, and the placebo effect, if any, are likely to be for subjective symptoms only.  They are told that it may be detrimental to relationships since deception is involved, and should be used in addition to, and never replacing, proven treatments. In short, it requires informed consent.

The customers, not the doctors, would provide these placebo pills to their terminally or chronically ill relatives. This address several problems. It takes away the deception between the doctor and patient, and the accompanying financial dilemma (placebos must be charged the same as regular pills to deceive properly, even though they cost significantly less). It is by definition compatible with the principle of non-maleficence (“Do No Harm”), and may offer subjective improvements even without objective changes in the underlying condition.

Although arguably unnecessary, the company can address ethical issues about the price of the placebo by operating on a voluntary pricing model. That is, the company provides the placebos free of charge initially, and rely on the customer to pay whatever they think it is worth based on the outcome, perhaps with a suggested amount and a maximum cap (personal anecdote: I once used a voluntary pricing model at a garage sale, and people were confused without a suggested price).

I read somewhere that for controlled studies, placebo composition is not regulated nor is disclosure required; some are simply sugar pills, while others are designed to have the same appearance and even mimic possible side effects. For the consumer market this is obviously unnecessary. However, the company is free to provide a wide range of completely inert placebos in different shapes, sizes, and colors. The consumer can be confident that the pills are safe. It would be considered a “dietary supplement”, of which government approval is not required. Even the standard disclaimer “This statement has not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any disease” seems redundant but wouldn’t hurt.

What do you think? Could this Obecalp company ethically sell placebos to the general public?

Fake Eggs

I rarely talk about anything personal on this blog; this will be an exception since I feel it is better told from a first person point of view. It combines poor storytelling with worse writing skills while diminishing neither.

I have lived in southern China since 2002. As a long time listener of the Skeptic’s Guide to the Universe, I was pleasantly surprised when Dr. Novella did a “Science or Fiction” on China. One of the unused questions was about the existence of a fake chicken egg industry in China, something I had heard countless reports about and taken for granted to be true.

In a later episode, I heard that Rebecca Watson was invited to Hong Kong and Dongguan by David Young to speak at Skeptics in the Pub.  Of all places, I thought, Dongguan, the manufacturing capital of the world – a place best described as “If they wanted to give the world an enema, this is where they would stick the tube”.  As a surprise, I decided to get some fake eggs and bring them to the Dongguan event.  I mean, where else would it be made?

I sent different people to various local markets to get fake eggs. Knowing that these are supposedly sold alongside or mixed in with real eggs, and not expecting truthful labeling, I asked them to buy the cheapest eggs possible, if all attempts fail.

In the end I was given a bag of eggs that were very cheap, and was told that they were “questionable” and “probably fake”. I examined them very carefully, and could not immediately tell which one/ones were fake. Well, when in doubt, Google (actually in China, Baidu). Bingo! Lots of search results showing how to distinguish fake eggs from real ones. They all say roughly the same:

  1. The fake shell is shinier, but not by much. (yeah, thanks a lot)
  2. The fake shell is slightly rougher. (uh huh)
  3. Noticeable sounds when shaken due to water seeping from coagulant. (testable!)
  4. A real egg will have a faint smell/stink. (subjective but testable!)
  5. A fake egg will have a duller sound when tapped lightly. (uh huh)
  6. The white and yolk of a fake egg will quickly mix together once cracked open, since they are made of the same material. (testable, but unsure why it wouldn’t mix in the shell)
  7. When pan-frying a fake egg, the yolk will break by itself because the artificial sac membrane can’t withstand the heat. (kinda testable)
  8. A fake egg has a rubbery mouthfeel when cooked. (subjective but testable)
  9. A real egg will have crack-like patterns when opened which disappear when cooked. (testable)
  10. A real egg’s yolk will be powdery when cooked, a fake egg’s will be rubbery (testable)
  11. A real egg will start to coagulate around 45 degrees Celsius, a fake egg will not when steamed. (questionable but testable)

Putting the eggs to the test without cooking, nothing was obviously wrong except for a few that had a noticeable sound when shaken. The shells did not feel, smell, or sound any different when tapped.

I decided to look at how fake eggs are made, and perhaps that would offer some insight on how to tell them apart. Thankfully there was no shortage of material online, such as this, this, and this. Apparently the yolk and white are made of the same material, with the yolk dyed. Strangely enough, no one shows how to make a seamless shell, which to me, seems like the most difficult part of the process.  I deal with molds on a daily basis, and making a shell without a parting line is not only difficult but expensive. I had always wondered how it was made, and this was disappointing.

I looked more closely at the material on hand, and it didn’t add up. Why would the white and yolk have different properties when cooked, if they are made of the same material? Why would the yolk and white mix when opened and not in the shell? Why does nobody show how the shell is made? And then it hit me. I had been searching for “how to tell a fake egg from a real one” and “how to make a fake egg”. Is it possible, that I had been begging the question all along?

Surely enough, after some further digging, it turns out that truth is stranger than fiction. The real scam, ironically, is that scam schools are scamming prospective scammers, by promising to teach them how to make something that can’t be done.  As I realized that, my eyes rolled back so far I saw my own amygdalae.  The entire fake egg story is nothing but a “Keyser Soze”, a myth sold on fear, a meme that fits the narrative. It exists right on the edge of plausibility, seemingly tangible but just out of reach. The existence of the scam schools further embellishes and lends credence to the story, even if those schools were simply exploiting the situation opportunistically.

There is a report of a government employee (ZHU, Bao Li) who wrote to then Premier Wen in 2008 about the fake eggs and receiving an official reply 5 months later, stating that an extensive investigation in Hunan, Shandong, and Guangdong provinces uncovered no fake eggs on the market. He subsequently posted an open reward of 1000 RMB for a verifiable fake egg in the local newspaper, which has gone unclaimed since April 2009. However, it should be taken into account that no reference links were provided despite the specific claims, and I was unable to find archived material. Anecdotally, I have not been able to find anyone in China, expat or local, who has personally seen and examined a fake chicken egg.

Many have pointed to abnormal/malformed eggs as proof of fake eggs. In fact, I had personally bitten into a strange yolk, and immediately jumped to that same conclusion. This article explains the different egg abnormalities, with links to actual scientific papers.

I had always told my friends about fake eggs in China, and made the observation that it probably originated as a dare or a challenge, since a lot of ingenuity is required to make a fake egg, not to mention profitably. After all, eggs are unbranded and generic, not exactly a favorite to be counterfeited. The local counterfeit industry typically targets:

  1. Name brand items with high added value, such as luxury watches, designer bags, and footwear.
  2. Unbranded items with high market value, such as gold plated lead ingots, shark fin, bird’s nest (swiftlet spit), and O. sinensis (fungus on mummified larva).
  3. Items that can be adulterated easily, such as adding melamine to diluted milk, injecting meat with water, mixing waste oil into cooking oil.
  4. Intellectual property, such as music, software, books.

This industry calls for a much higher profit margin, being illegal and all. All of the above involve very large profit margins. Would it make sense to counterfeit (not adulterate) a low value, generic item that is fragile, tricky to make, and difficult to transport? Let’s perform a quick reality check.

Local wholesale egg price is around 5 RMB/500g. A medium sized egg is around 50 g, or about 0.5 RMB/pc (about 8 cents/pc). Let’s disregard the widely quoted figure of 4x profit and use a conservative 2x profit, a dismal return for a slammer-worthy offense. That puts us at 4 cents wholesale, or about 3.5 cents ex-factory, per PIDOOMA estimate method. For a rough comparison, let’s look at prices of some similarly made components, at container-load export quantities, which should be far cheaper than wholesale. An artificially made egg should be close to the price of a jelly (which is what it is) plus a cheap shell, which is like a ping pong ball. A 16.5g jelly candy (5 ton minimum) costs at least 5 cents, and a hollow ball (10k minimum) costs at least 6 cents. This does not take into account the fact that one has to be encased in the other, seamlessly. Even if you take away the jelly packaging and flavoring costs, things do not look good. The component material price alone (11 cents) already exceeds the wholesale price (8 cents). Keep in mind, these prices are for factory level mass production; smaller operations likely lack the production efficiencies and raw material pricing advantages.

Another major cost is labor. Once I looked at the actual alleged production process, it was obvious that the daily production potential per person is optimistic bordering on delusive. The inner and outer sac membranes are tricky to make and labor intensive, taking up to a few minutes to form. Let’s say the scammer can put in 10 solid hours a day, or 600 minutes, with no breaks or mistakes. That’s at most 300 eggs, without any time to make the shell. Let’s assume the scammer is both talented and ambidextrous. That’s 600 eggs per talented ambidextrous scammer per day. Considering that normal, slammer-free work pays at least USD$16-20/day, labor cost per egg could easily constitute 4 cents. That’s before anything else is calculated such as rent, utilities, overhead, transportation, and raw material.

Technical problems notwithstanding, a simple look at the cost could have exposed the myth. However I had blindly accepted it as fact without examination, since it seemed to fit the narrative perfectly. I had wanted it to be true, and that was enough to obscure the warning flags. It is an example of how powerful our own biases can be, and despite wishful thinking, a humbling reminder of my own credulity.

Update (2015/02/25): Getting some heavy traffic from imgur today.  Here is additional information on the raw material cost for those interested:

From a weight perspective, 1,500 eggs would weigh around 90kg.  Let’s say it’s 90% water and 10% bought materials (reports of fake eggs being 99% water is BS; an egg shell easily comes in at 10+% of the weight).  Assuming free water and an impossible 100% manufacturing yield, that’s 9kg of purchased material, which according to the articles, allegedly costs around USD$2.25/kg.  Sodium Alginate itself costs over 3x than that, paraffin wax, calcium carbonate and gypsum powder can be close to that price, for industrial grade (not food grade) raw material, ex-works, in container loads.  i.e., even in factory quantities, the raw material costs far exceed what was stated in the articles.

Counterfeiters cannot be stopped by police; however they can be stopped by a lack of profit.  Given the methods and ingredients described, it is highly unlikely that anyone could produce counterfeit eggs at break-even, let alone at a profit margin enticingly enough to risk jail.