Using instrumental variables to disentangle treatment and placebo effects in blinded and unblinded randomized clinical trials influenced by unmeasured confounders

Abstract: Clinical trials traditionally employ blinding as a design mechanism to reduce the influence of placebo effects. In practice, however, it can be difficult or impossible to blind study participants and unblinded trials are common in medical research. Here we show how instrumental variables can be used to quantify and disentangle treatment and placebo effects in randomized clinical trials comparing control and active treatments in the presence of confounders. The key idea is to use randomization to separately manipulate treatment assignment and psychological encouragement messages that increase the participants' desire for improved symptoms. The proposed approach is able to improve the estimation of treatment effects in blinded studies and, most importantly, opens the doors to account for placebo effects in unblinded trials.