Despite their ubiquitous presence, placebos and placebo effects retain an ambiguous and unsettling presence in biomedicine. Specifically focused on chronic pain, this review examines the effect of placebo treatment under three distinct frameworks: double blind, deception, and open label honestly prescribed. These specific conditions do not necessarily differentially modify placebo outcomes. Psychological, clinical, and neurological theories of placebo effects are scrutinized. In chronic pain, conscious expectation does not reliably predict placebo effects. A supportive patient-physician relationship may enhance placebo effects. This review highlights “predictive coding” and “bayesian brain” as emerging models derived from computational neurobiology that offer a unified framework to explain the heterogeneous evidence on placebos. These models invert the dogma of the brain as a stimulus driven organ to one in which perception relies heavily on learnt, top down, cortical predictions to infer the source of incoming sensory data. In predictive coding/bayesian brain, both chronic pain (significantly modulated by central sensitization) and its alleviation with placebo treatment are explicated as centrally encoded, mostly non-conscious, bayesian biases. The review then evaluates seven ways in which placebos are used in clinical practice and research and their bioethical implications. In this way, it shows that placebo effects are evidence based, clinically relevant, and potentially ethical tools for relieving chronic pain.