"Positive expectation activates a complex series of brain activities that inhibit the transmission of pain information," he told hundreds of delegates at the Australian and New Zealand College of Anaesthetists (ANZCA) annual scientific meeting.
He says a previous exposure to the drug replaced by the placebo is important so the patient is primed on what to expect.
"Learning is crucial."
However, not all people respond to placebos and a future challenge is to find out why.
He says a major concern is the use of the placebo effect to cheat in sport.
Describing this as "psychological doping", he says an athlete's performance will improve significantly if you give a painkiller such as morphine for two days, followed by a placebo on competition day.
"But no doping agency will be able to detect the drugs."
Similar outcomes could be achieved with non-drug placebos, for example boosting performance by making an athlete believe they are being given pure oxygen at high altitude.
Another example is athletes being tricked during training that they are performing above their peak, which could lead to a better performance on competition day.