The Collaborative International Dictionary of English v.0.48:

Placebo effect \Pla*ce"bo ef*fect`\, n. (Med.)
   a reaction by a patient who receives a placebo[2], in which
   the symptoms of illness are lessened or an anticipated effect
   is experienced. Because the placebo[2] itself has no
   pharmacological activity, this reaction is mediated by the
   expectations of the patient receiving the placebo[2]; the
   reaction is considered as an example of the power of
   suggestion.

   Note: Dramatic subjective effects such as relief of
         discomfort or pain are sometimes observed due to
         administration of a placebo, but in some cases
         measurable physiological effects may also be observed.
         [PJC]

WordNet (r) 3.0 (2006):

placebo effect
    n 1: any effect that seems to be a consequence of administering
         a placebo; the change is usually beneficial and is assumed
         result from the person's faith in the treatment or
         preconceptions about what the experimental drug was
         supposed to do; pharmacologists were the first to talk
         about placebo effects but now the idea has been generalized
         to many situations having nothing to do with drugs