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51�Թ�� Business School's Professor Franco Sassi interviews Leon co-founder Henry Dimbleby about the nation's relationship with UPFs and how to change it

Main image: Henry Dimbleby

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How protectionism risks undermining the US economy

Jonathan Haskel — Tue, 25 Feb 2025 10:39:25 +0000

How protectionism risks undermining the US economy

Jonathan Haskel Tue, 25/02/2025 - 10:39

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10 April 2025

Donald Trump’s announcement of wide-ranging tariffs has threatened to upend the rules of global trade that have been in place for decades, impacting supply chains and businesses across the world.

The US President’s plan has been designed, in his words, to be reciprocal. What could be fairer than this? The theory is that the US will charge its trading partners in response to what they charge them.

What this means in practice is that the US will charge a country based on it having a goods trade surplus with the US. Some countries that do not have a notable surplus will still be hit with a universal baseline tariff of 10 per cent. For example, countries in the European Union will be subject to a 20 per cent tariff, while the UK will face the baseline 10 per cent tariff.

As the consequences of these tariffs will have major consequences for the global economy, it is worth considering the logic that has informed this decision and whether it stands up to scrutiny from an economic perspective.

Let’s say a country, for example the UK, is running a goods trade deficit with Costa Rica of £100 worth for bananas. From an economics point of view such a deficit makes perfect sense: the UK does not grow very good bananas, but we are good at education and financial services, which we export by accepting Costa Rican students, and providing secure banking for Costa Rican residents. Therefore, we run a deficit on goods, balanced by a surplus on services.

President Trump's reciprocal tariff calculation asks: what would the British tariff have to be on Costa Rican bananas to rebalance trade in bananas? He appears to have done this by assuming the tariff would raise an import price by a certain percentage, which in turn would cause British consumers to switch away from imported bananas by another percentage, which would then reduce banana imports. Select those percentages and work out the tariff that would entirely wipe out all imports. Then take half of that number (for obscure reasons) and that is the alleged tariff rate which Costa Rica is charging the UK.

These bizarre counterfactual calculations have nothing to do with the actual tariffs which are imposed. True, our bananas trade is likely affected by tariffs and safety standards on agricultural products. But fundamentally the pattern of trade is determined by the patterns of comparative advantage across different countries. To repeat, if the UK is good at financial services and education and Costa Rica is better at bananas, both are better off with free trade.

What then follows from this?

Firstly, these numbers should not be taken as an estimate of the type of tariffs which the US or any other country faces. Average tariff rates which the UK imposes on the US are well below five per cent when calculated properly - that is, zero per cent on the vast majority of goods, and higher percentages on goods like agricultural products.

We should also not assume that the UK has been given special treatment by having a lower rate than other countries. The US has a slightly lower trade deficit with the UK than with Europe, so the simple maths of this calculation would lead to a smaller ‘reciprocal’ tariff.

Thirdly, we should remember that the US is a relatively closed economy. British imports are around 30 per cent of GDP, American imports are around 15 per cent, so we must not overstate the impact of unilateral American restrictions on trade on the world.

Unless we descend into a full trade war, the economy most hurt by these measures is the American economy.

The right response to these tariffs is to carry on trading and let the US sink under the weight of its own bad policies.

More narrowly, what does this mean for the UK? The effects of this policy will of course be concentrated in certain export sectors, such as the car industry, and I would expect policies to be forthcoming to mitigate that adverse shock. But more broadly, we should stay focused on what will get the UK economy growing: policy to encourage science, clusters and startups.

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Jonathan Haskel takes a closer look at why "reciprocal" tariffs misunderstand the real nature of global trade

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You’ve raised prices – now what?: Raconteur speaks to Dr Xinrong Zhu about companies passing rising costs onto consumers

Evie Burrows-Taylor — Mon, 03 Feb 2025 10:02:14 +0000

You’ve raised prices – now what?: Raconteur speaks to Dr Xinrong Zhu about companies passing rising costs onto consumers Evie Burrows-Taylor Mon, 03/02/2025 - 10:02

28 January 2025

Will European regulators shape Hollywood’s bidding war?

Tommaso Valletti — Wed, 15 Jan 2025 12:14:02 +0000

Will European regulators shape Hollywood’s bidding war?

Tommaso Valletti Wed, 15/01/2025 - 12:14

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Article at a glance

The European Commission (EC) competition authority is scrutinising rival bids for Warner Bros. from Netflix and Paramount, an unusual scenario
Both bids raise different competition concerns
A frontrunner could emerge if one bidder gets cleared before the other
The EC prefers light-touch remedies
US politics, not Europe, is likely to decide the winner

A bidding saga across the Atlantic

Europe’s competition regulator is simultaneously reviewing competing bids by major US companies Netflix and Paramount to acquire entertainment company Warner Bros. This is unusual and strategically sensitive, given the current geopolitical climate. The bidding saga has attracted significant attention on both sides of the Atlantic.

Both bids raise competition concerns, but in different ways:

The Paramount deal would reduce rivalry between two major Hollywood studios.
Netflix’s acquisition of Warner Bros. would increase market dominance in streaming across Europe

Professor Tommaso Valletti, Professor of Economics at 51�Թ�� Business School and former Chief Competition Economist at the EC, questions whether the EC will act boldly, given its preference for light-touch remedies and geopolitical considerations. US politics, not Europe’s regulators, may ultimately decide the winner.

What’s at stake

Netflix agreed to buy Warner Bros.’ studios and streaming assets in a transaction valued around $82.7 billion. To challenge this, rival Paramount Skydance launched a hostile takeover bid for the entire company, including news network CNN, worth $108 billion, offering shareholders a higher per-share cash price.

The Warner Bros. board backs Netflix, but competition concerns are significant and more complex than the ones associated with Paramount’s bid.

A lack of clear precedent in the EU merger control raises a key question: how will the EC proceed?

Because all three companies operate across Europe and the Americas, the European Commission must review the market implications under its EU merger control framework. A simultaneous review could shape the race. By clearing one bidder, while subjecting the other to a longer investigation, a frontrunner could emerge.

A lack of clear precedent in EU merger control raises a key question: how will the EC proceed? Historically, the regulator tends to favour light-touch remedies, like small divestitures or access commitments, over prohibitions.

Netflix: from scale to market power

Netflix’s story of scale in Europe has shifted to revenue diversification. Netflix already shows signs of pricing power: in the UK, a standard subscription rose from £6 to £13 per month over the past decade. A deal with Warner Bros. would lead to:

Further market concentration: Netflix already holds over 50 percent of Europe’s subscription video-on-demand (SVOD) market. Combining this with Warner Bros.’ studios, HBO Max and other streaming platforms would increase its dominance.
Monopolisation of streaming content: Netflix could control one of the largest content libraries and production pipelines in the world, cutting off production for cinemas and other traditional content platforms.

Netflix could address these concerns through remedies such as divesting HBO Max. Its likely defence would be that its streaming services compete with a broader digital entertainment market, including social media and video gaming. Regulators may accept this argument to some extent, although previous merger reviews have generally used a narrower, SVOD-focused market definition.

Paramount: traditional Hollywood rivalry

Paramount’s acquisition of Warner Bros. raises more traditional competition concerns. Combining two established major Hollywood studios would:

reduce industry rivalry and lead to fewer big players in Hollywood,
increase bargaining power over distributors, advertisers and creators, and
potentially lead to fewer market players, less innovation, higher costs for consumers.

The deal would also continue the consolidation of Hollywood studios that has been ongoing for 50 years, reducing the “Big Five” studios (Disney, Warner Bros., Universal, Paramount and Sony) to four. Disney would remain number one, possibly facing stronger competition from the combined entities currently ranked number two (Warner Bros.) and number five (Paramount).

While the merger could be easier to clear overall, overlaps between the studios, for example franchises between Paramount and Warner Bros., could still raise competition concerns that may be harder to address.

Why Europe and the US may decide differently

Whether the EC’s decision will impact the deal remains uncertain. In the US, regulators face a different and more political context. Paramount’s bid would include CNN, which Netflix is not acquiring. President Trump, a vocal critic of CNN, has previously argued that the network should be sold or restructured. These dynamics may influence the outcome.

Given the current political climate, a European ban on either deal seems unlikely. While the EC can still influence the pace and outcome of the bidding war, the winner will ultimately be decided in the US.

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A rare regulatory scenario could see Brussels tilt the Netflix - Paramount battle for Warner Bros.

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Does influencer marketing really work in 2026?

Omar Merlo — Wed, 15 Jan 2025 12:14:02 +0000

Does influencer marketing really work in 2026?

Omar Merlo Wed, 15/01/2025 - 12:14

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Article at a glance:

Influencer marketing is worth $24 billion as an industry, but followers are becoming cynical. Authenticity is key to building and maintaining consumer trust, but it’s not a single, fixed concept. Research by the Business School’s Omar Merlo, Associate Professor of Marketing Strategy and Andreas B. Eisingerich, Professor of Marketing, explores the vital elements to convey true authenticity and how this can be harnessed by major brands. Dr Merlo shares what will make or break influencer marketing in 2026.

Globally, the influencer marketing industry is estimated to be worth $24 billion. Influencers set trends, raise brand profiles, and shape – directly or indirectly – how many of us live. With this rising impact, however, comes greater scrutiny.

Consumers are now more discerning when consuming influencer content, following some with loyalty and trust while viewing others with suspicion. So why do consumers trust some influencers and not others?

One study found that the most important factor in deciding whether or not to follow an influencer on social media is their authentic and genuinely care about their interests. At the same time, over a third of consumers think influencers misrepresent themselves and the products they promote, and almost half think most of them are fake.

Taken together, these findings suggest that there’s a gap; consumers are seeking genuine, honest influencers, but many influencers struggle to convey this authenticity. This is a problem for brands and their chief marketing officers, as well as influencers themselves.

Figure 1: What our research suggests influencers and brands should leave behind in 2025 and take forward for 2026

Stop	Start
Focusing on formal credentials	Talking about relatable experiences
Relying on big-name recognition	Interacting and engaging to build community
Hiding influencer-brand relationships	Being honest and upfront about self-interest
Forcing brand scripts and lines into content	Leading with original storytelling
Presenting an image of perfection	Admitting flaws and mistakes
Trying to hire authenticity off the shelf	Creating the conditions for true authenticity

How to be more authentic in 2026

So, what can influencers and the brands that hire them, do to move from a transactional to a transformational relationship with the clued-in consumers of 2026?

Our research, through 185 interviews with brand managers, agencies, influencers and consumers across the world, sheds light on what authenticity means and how to better reflect it:

Experience matters more than formal credentials: Our survey respondents tended to trust amateur runners, for example, more than Olympic athletes. Consumers connect with expertise gained through real, relatable human experience.

Engagement is a two-way street: Responding, interacting and engaging with followers is key to influencers building and maintaining a community around them. It creates a space where followers feel heard and respected.

Be honest about self-interest: Research from 51�Թ�� has shown that 96% of sponsored posts are not disclosed. People know that brands pay influencers, so trying to hide it can end up making followers feel like they are being misled, and that they are an asset to be monetised. Being clear about it helps them feel valued.

Authentic voices and stories will shine through: Imposed scripts and brand lines come across as inauthentic and artificial. Original storytelling can be a unique selling point and can even be the reason followers stick around.

Flaws are welcome: Psychologically, revealing a low-impact piece of negative information – such as a mistake or misunderstanding – makes consumers less likely to look for other negatives.

Of course, this can’t be mistaken as a checklist for brands to tick off. Findings suggest that different stakeholders prioritise each dimension differently. Consumers mostly value integrity and transparency, for example, while influencers prioritise originality and expertise.

When influencers miss the mark, they risk losing the trust of their audience. To solve this, brands need to appreciate that authenticity is not an individual trait that influencers do or do not possess – rather, it’s a collective outcome that forms when stakeholder priorities align. Shifting approach to find this alignment can be game-changing for brands, in a global market where authenticity matters most.

The era of renting credibility through one-off posts from influencers is over. Brands that treat influencers as partners rather than media channels and consumers as communities rather than impressions, will earn the most credibility. Those that don’t will simply add to the noise. In 2026, influencer marketing will work only when the conditions needed for true authenticity are prioritised.

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Authentic future: the shape of influencer marketing in 2026

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Dr Heeyoung Yoon on consumer judgment, bias and better decision-making

Shamita Harsh — Wed, 15 Jan 2025 12:14:02 +0000

Dr Heeyoung Yoon on consumer judgment, bias and better decision-making

Shamita Harsh Wed, 15/01/2025 - 12:14

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14 October 2025

Dr Yoon’s research investigates how consumers predict their consumption and experiences, why those predictions are often systematically biased, and how better-designed choices can improve both individual well-being and broader societal outcomes.

As Assistant Professor of Marketing at 51�Թ�� Business School, Heeyoung Yoon brings a research agenda that blends consumer psychology, marketing, and public policy. Her work focuses on the ways in which consumers form expectations, how these expectations deviate from reality, and how such biases influence everyday choices.

At the heart of her research is the question: why do people so often mispredict their own behaviours? From overestimating how much they will enjoy a product, to underestimating the influence of situational and contextual factors, these biases can have far-reaching consequences. Dr Yoon’s research sheds light on the psychological processes behind these systematic errors, while also identifying interventions that can guide individuals toward more beneficial and sustainable decisions.

From consumer psychology to societal impact

Dr Yoon’s research is motivated not only by curiosity about how people think but also by the desire to improve outcomes for individuals and society. She studies how consumer mispredictions influence decisions with long-term implications for well-being, sustainability, and even carbon emissions. For example, her work reveals how consumers’ misplaced confidence in preference as the primary driver of consumption can lead to inaccurate forecasts and suboptimal decisions.

By highlighting the role of overlooked factors such as habits, motivation and availability, her research demonstrates that small shifts in framing, design, or choice architecture can promote better consumer outcomes. This focus places her work at the intersection of academic inquiry and practical solutions, offering insights for marketers, policymakers, and organisations seeking to encourage prosocial and sustainable behaviour.

The gap between prediction and reality

In a recent article published in the Journal of Consumer Research, Dr Yoon shows that consumers systematically overestimate the role of personal preference in determining how much they consume. While people predict that “liking” will drive consumption quantity, contextual factors like availability and habit often play a stronger role. This disconnect helps explain why consumption predictions are frequently inaccurate and why interventions that take account of these overlooked influences may be more effective in guiding healthier and more sustainable decisions.

In her ongoing projects, she continues to investigate biases in assortment choices, comparison judgments, and sustainability decisions. These lines of inquiry build a comprehensive picture of how expectations and decision structures shape consumer behaviour.

Dr Yoon completed her PhD in Marketing at New York University’s Stern School of Business. Her academic training and research experience equip her with a strong foundation in both experimental methods and theory-driven inquiry. By bringing these approaches to 51�Թ��, she aims to expand collaborations that cut across marketing, psychology, and public policy.

On joining 51�Թ��, she reflected: “51�Թ��’s commitment to world-leading research and global impact makes it an inspiring place to be. I’m excited to contribute to and learn from colleagues who are advancing solutions to some of the most pressing challenges of our time.”

At 51�Թ�� Business School, Dr Yoon looks forward to continuing her research into consumer judgment and decision-making while building connections with colleagues working on sustainability, behavioural science, and social impact. Her goal is to develop insights that not only advance academic knowledge but also create meaningful benefits for consumers and society.

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Dr Yoon talks about consumer behaviour and interventions that can guide towards more sustainable decisions.

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Sustainable consumption: What’s holding us back and what can be done about it

Eduardo B. Andrade — Wed, 15 Jan 2025 12:14:02 +0000

Sustainable consumption: What’s holding us back and what can be done about it

Eduardo B. Andrade Wed, 15/01/2025 - 12:14

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21 October 2025

The global ‘consumer class’ is predicted to reach 5.7 billion within the next decade. As the demands on the planet’s natural resources continue to grow, this group—especially the wealthier segments—has a key role to play in mitigating climate change and environmental degradation through sustainable consumption.

To date, however, this has proved challenging – people have genuine environmental concerns, but frequently fail to translate these into sustainable, environmentally friendly consumer habits. Our latest research explores why this is the case and how we can address the problem, identifying a range of barriers to sustainable consumption and ways for consumers, businesses and policymakers to overcome them.

Mapping the problem

To understand the obstacles, it’s useful to break them down into three main categories: market, individual and societal. Market obstacles relate to products and services themselves, including price, availability and perceived quality. Individual obstacles are rooted in people’s motivations and beliefs, including awareness, biases and understanding of impact. Societal obstacles relate to influences that arise from the social environment, such as norms, political identity and socioeconomic status.

Within each of these categories, barriers can be overcome in two ways. They can be directly removed or reduced through targeted interventions (minimisation). And when structural constraints make barriers too entrenched to minimise, they can be worked around with creative solutions (circumvention).

Market obstacles

Differences in the availability of a product or action, or how visible or convenient it is, can influence consumers’ decisions. Sustainable options and practices often suffer in this regard – recycling and repair take more effort than throwing things away or replacing them, while eco-friendly options can be outnumbered by plastic-wrapped rival products, for example. The sustainability premium that sees eco-friendly choices cost more is another barrier to sustainable consumption, while consumers may also view some of these products as lower-quality.

Policymakers can reduce the visibility advantage of unsustainable products by, for example, banning single-use plastics and taxing companies for excessive packaging, while making environmental benefits clearer through mandating consistent sustainability messaging on products, packaging and ads. Right-to-repair laws, meanwhile, can trigger the growth of a repair-and-reuse infrastructure.

Alternatively, retailers could further increase the availability and salience of second-hand options, which often happen to be more sustainable and cheaper than the conventional alternatives. Manufacturers and shops could bundle unsustainable and eco-friendly options together, giving consumers the opportunity to at least try more sustainable options.

Marketing campaigns that attach sustainability perceptions to manufacturers as a whole, rather than to individual product features, provide an opportunity to boost overall perceived quality and link quality and sustainability in consumers’ minds.

Individual obstacles

Sustainable choices are strongly impacted by the extent to which consumers spontaneously think of sustainability when considering their options, and the perceived impact that an eco-friendly choice might have. Common biases towards wanting to own items or preferring the default option, meanwhile, are strong drivers of waste and overconsumption.

Education can help, both by more entrenching sustainable principles in consumers’ minds and by teaching them about the environmental impact of ownership and choices. At the same time, it can also be helpful to embed sustainability into product attributes people already prioritise, for example, focusing on the health impacts of microplastics to encourage eco-friendly packaging choices.

On a simpler level, changing the narrative by presenting sustainable options as the status quo (rather than the alternative) can help circumvent biases by relying on inertia rather than engagement. Research has found this to be effective in normalising renewable energy, reducing meat consumption, and boosting sustainable investing. It may also help overcome the tendency to own a product rather than to rent it.

Societal obstacles

In much of modern life, unsustainable consumption has become the norm, including in transport, household energy and nutrition. People’s political views and class perception can strengthen these norms and set them against change. Socioeconomic differences exacerbate the damage this causes, with the wealthiest responsible for the most environmental damage, and the least wealthy worst affected by the consequences.

Messaging is key to overcoming these barriers. For example, sustainability communication that is more in line with one’s political identity is more likely to be effective. If these messages are delivered by a body or an individual with existing standing among a particular group, they can be even more impactful.

Similarly, messaging or events that deliberately or spontaneously signal a green norm can help change behaviours. Consumers are more likely to install solar panels or heat pumps if they see their neighbours doing so. Gamifying sustainable habits, e.g. by offering points and rewards for eco-friendly choices, can also help to reset norms by activating alternative motivational pathways.

Future potential

Our research sets out the primary obstacles to sustainable consumption, some proven and promising ways to minimise or circumnavigate them, and – critically – the gaps where further research could explore new or more impactful solutions. In this way, it can serve as a roadmap for developing our understanding of environmentally friendly consumption and how to promote it, which will be vital as we move towards an ever more consumer-driven global society.

This article draws on findings from “Obstacles and Opportunities for Sustainable Consumption: A Comprehensive Conceptual Model, Literature Review, and Research Agenda” by Eduardo B. Andrade (51�Թ��) and Yan Vieites (FGV-EBAPE (Escola Brasileira de Administração Pública e de Empresas))

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New research reveals how policy and behavioural insight can move the dial on the sustainable consumption gap

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How platforms can win by selling smarter, not harder

Jiahua Wu — Wed, 15 Jan 2025 12:14:02 +0000

How platforms can win by selling smarter, not harder

Jiahua Wu Wed, 15/01/2025 - 12:14

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28 July 2025

Many online service platforms - think HomeAdvisor, RatedPeople, or Porch - face a common challenge: they sell job leads to providers who must then compete fiercely for customer attention. Allowing customers to post short-term jobs, these service providers can pay for access. However, if the competition is perceived to be too high, they’ll hold back, hurting both the platforms’ revenues and their growth potential.

We explore an innovative way these online platforms can strategically use information to manage provider expectations, boosting participation and revenues simultaneously.

Understanding provider behaviour

Service providers buy leads hoping to win jobs from customers. However, too many providers chasing a single lead decreases the value of participation. This fear of excessive competition can discourage them from buying leads in the first place.

Platforms possess critical information - the number of providers interested in a particular job -that they typically don’t share openly. This lack of transparency creates uncertainty, often making providers overly cautious.

One of the key benefits highlighted in the study is that partial information disclosure can help manage provider expectations based on the level of competition.

Nudging providers towards participation

Our study uses a framework known as Bayesian persuasion - the strategic sharing of information to influence someone’s decision by shaping what they believe. The framework allowed us to analyse how platforms can optimise the information they reveal about provider competition. The key insight: carefully tailored partial information can significantly increase lead purchases.

One of the key benefits highlighted in the study is that partial information disclosure can help manage provider expectations based on the level of competition. When competition is below a certain threshold, the mechanism allows interested providers to see clear value, as their chances of securing the job remain favourable. Conversely, for leads facing intense competition, i.e., above the threshold, a fixed, limited number of providers are encouraged to purchase the lead, regardless of how many are actually interested. Interestingly, providers respond positively to this consistent approach, perceiving their chances as favourable even in more competitive situations.

Why fixed prices beat flexible ones

Platforms often try dynamic pricing, changing lead prices based on real-time competition. Interestingly, the research finds this common practice is suboptimal. A well-designed fixed-price approach, paired with strategic information disclosure, generates more revenue.

Why? Providers perceive dynamic pricing as a direct signal of competition intensity - higher prices might mean higher demand, but also tougher competition. This direct correlation reduces their willingness to participate. In contrast, a fixed price coupled with carefully managed information reduces uncertainty, minimises coordination failures among providers, and consistently boosts revenue.

Effective real-world implementation

Implementing these insights is straightforward. Platforms need only set clear limits on how many providers can purchase each lead. This is already practiced informally by some platforms, but the study provides a precise method to identify optimal numbers, maximising provider participation and platform profits simultaneously.

By harnessing these insights, platforms can unlock new growth opportunities, sing revenues through smarter management of provider competition, rather than just harder selling.

This article reflects on findings from the paper "Information Design and Pricing in Lead-Selling Platforms with Supply Competition" by Jiahua Wu with co-authors Yanwei Sun, Niloofar Zamani-Foroushani and Zhe Liu from the 51�Թ�� Business School.

This article was updated on 1 August 2025 to credit all the co-authors of the original research paper and their findings cited in the article.

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