From Eric Asimov, "Wine’s Pleasures: Are They All in Your Head?" NY Times, May 7, 2008:
But assuming for the moment that it’s true that most drinkers prefer the cheap stuff, why does anyone bother buying $55 cabernet? One answer is provided by a second experiment, in which presumably sober researchers at the California Institute of Technology and the Stanford Business School demonstrated that the more expensive consumers think a wine is, the more pleasure they are apt to take in it.
The researchers scanned the brains of 21 volunteer wine novices as they administered tiny tastes of wine, measuring sensations in the medial orbitofrontal cortex, the part of the brain where flavor responses apparently register. The subjects were told only the price of the wines. Without their knowledge, they tasted one wine twice, and were given two different prices for that wine. Invariably they preferred the one they thought was more expensive.