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Odometer Blind Spots Can Be Expensive for Buyers

Think you are shopping wisely for a used car? New research from the McCombs School of Business at the University of Texas at Austin suggests that even careful buyers may be swayed by something as simple as the first digit on the odometer when judging a vehicle’s value. This subtle influence can shape perceptions of worth in ways that are not entirely rational, leading consumers to make decisions they might not otherwise make if they considered the full picture.

At the heart of this behaviour is left-digit bias, a well-documented psychological tendency. People often perceive £1.99 as significantly cheaper than £2.00, even though the difference is negligible, because their attention is drawn disproportionately to the leftmost digit. This cognitive shortcut simplifies decision-making but can distort judgment. When applied to car mileage, the same bias can lead buyers to overvalue vehicles that appear to fall just below a round-number threshold.

This inattention can prove costly. According to research led by marketing professor Raghunath Rao, when a car’s odometer reads just under a multiple of 10,000 miles—for instance, 49,999 instead of 50,000—buyers may be willing to pay notably more than the car is objectively worth. On average, this premium can reach as much as $170 per vehicle. Rao describes this extra amount as a kind of “mental tax” that consumers unknowingly impose on themselves by failing to assess mileage more carefully.

Although private sellers may not consistently take advantage of this tendency, dealerships are often more attuned to it. The study suggests that professional sellers are better positioned to recognise and capitalise on consumer biases, effectively capturing that “mental tax” as additional profit. In this sense, the marketplace does not simply reflect value; it also reflects how value is perceived, particularly when buyers rely on quick heuristics rather than detailed evaluation.

To explore this phenomenon, Rao and his collaborator Andreas Kraft analysed Department of Motor Vehicles data covering 4.8 million used car transactions in Texas between 2014 and 2021, representing roughly 10% of all such sales in the United States. They examined pricing and sales patterns around mileage thresholds such as 20,000, 50,000, and 100,000 miles. Their findings showed a consistent pattern: cars just below these cut-offs tended to sell at higher prices and more quickly than nearly identical cars just above them. The effect was especially pronounced at dealerships, where the bias appeared roughly twice as strong as in private sales, and was most evident around the 100,000-mile mark.

Importantly, the implications of left-digit bias extend beyond mileage alone. Similar patterns may influence how consumers evaluate other product features, such as the battery range of electric vehicles. A car advertised with a range of 310 miles may seem far more appealing than one with a range of 280 miles, even if the practical difference is relatively modest. The broader lesson is not directed at sellers but at buyers: awareness of these unconscious biases is essential. By consciously considering all available information rather than focusing on a single prominent digit, consumers can make more informed and financially sound decisions in any major purchase.

More information: Andreas Kraft et al, Market Effects of Inattention: Theory and Evidence from Left-Digit Bias, Journal of Marketing Research. DOI: 10.1177/00222437261427475

Journal information: Journal of Marketing Research Provided University of Texas at Austin

Rethinking wine packaging: Could glass be replaced? Researchers examine consumer attitudes

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Glass has dominated wine packaging for nearly four centuries and remains the preferred choice among consumers. Still, growing concerns about sustainability may create opportunities for alternative formats, according to a recent study by food science and economics researchers. While glass continues to be closely associated with quality, evolving environmental awareness and innovation in packaging could gradually shift consumer attitudes.

The study, published in Cleaner and Responsible Consumption, examined not only packaging preferences but also how much consumers are willing to pay for wine in different formats. It further explored how perceptions vary across generational groups, including Baby Boomers, Generation X, Millennials, and Generation Z. These insights provide a more nuanced understanding of how tradition, price sensitivity, and sustainability considerations interact in shaping consumer behaviour.

Packaging plays a critical role in maintaining wine quality. Exposure to light, heat, and oxygen can significantly affect flavour and longevity. At the same time, proper sealing is essential to prevent microbial spoilage. Glass has long been valued for its ability to preserve these qualities, contributing to its enduring reputation. Over time, however, wine containers have evolved—from early pottery and wooden casks to modern alternatives such as paper cartons, bag-in-box formats, PET plastic bottles, flexible pouches, and aluminium cans.

Despite these options, perceptions of quality remain strongly tied to glass. Many consumers continue to view it as the hallmark of premium wine, although researchers suggest this perception could change gradually as alternative packaging improves and becomes more familiar. The study’s findings indicate that consumers are generally willing to pay more for wine packaged in glass than in any other format, with younger consumers, particularly those in Generation Z, showing the highest willingness to pay.

Aluminium emerged as the second most preferred option across all age groups, followed by PET plastic, while flexible pouches ranked lowest. Interestingly, the gap in willingness to pay between glass and other formats was substantial, with flexible packaging attracting significantly lower valuations. These results highlight the challenge alternative packaging faces in overcoming entrenched perceptions of quality and value, even as they offer potential environmental advantages.

The study also examined how providing information about sustainability influences consumer decisions. Participants were divided into groups that received different types of information, such as carbon footprint data or recyclability details, while a control group received none. The findings suggest that such information can meaningfully affect willingness to pay, though not always in predictable ways. For example, those exposed to carbon footprint information showed a higher willingness to pay for glass, while those given recycling information were slightly less willing. This indicates that how sustainability is communicated can significantly shape consumer responses.

Perceptions of environmental impact were notably divided. A substantial proportion of respondents viewed glass as the most sustainable option, while a nearly equal share considered it the least sustainable. This polarisation underscores the complexity of consumer understanding around sustainability, which is often influenced by conflicting messages and a lack of clarity. Researchers note that consumers can be sceptical of sustainability claims, particularly when faced with technical language or inconsistent labelling standards.

Overall, the findings suggest that while glass is likely to retain its status as the premium packaging choice, there is emerging interest—especially among younger consumers—in alternative formats. Improved communication around environmental benefits, along with continued innovation, could help expand this niche. At the same time, broader market shifts, such as supply chain disruptions experienced during the pandemic, may further encourage both producers and consumers to reconsider long-standing packaging conventions.

More information: Mark Walker Bartz et al, Perceptions and preferences of U.S. wine consumers: Glass vs. alternative packaging, Cleaner and Responsible Consumption. DOI: 10.1016/j.clrc.2026.100417

Journal information: Cleaner and Responsible Consumption Provided by University of Arkansas System Division of Agriculture

From Waste to Worth: Supermarkets Gain by Donating Unsold Food

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Around one-third of all food produced globally is lost or wasted each year, representing an estimated US$1 trillion in value, according to the FAO. A substantial portion of this waste occurs at the retail level, where large quantities of edible food are discarded despite remaining safe for consumption. This disconnect highlights a persistent inefficiency in food systems, where surplus products are not effectively redirected before they become waste.

Food waste is not only environmentally unsustainable but also financially burdensome for retailers. When products go unsold, businesses lose potential revenue, and they must also bear the additional costs associated with disposal, including transport and waste handling. These combined pressures make surplus food management an important economic issue, not just a sustainability concern.

A recent analysis from the University of Copenhagen sheds light on how retailers can approach this challenge more strategically. Focusing on Danish supermarkets, the study finds that at least half of all surplus food is currently discarded. Although part of the analysis draws on data from a limited number of retail chains, the overall findings point clearly to more efficient alternatives that can reduce both waste and costs.

The research challenges the common assumption that donating surplus food is primarily a charitable act with little financial return. In reality, once retailers determine that products are unlikely to sell at full price, donation often becomes the more economically rational choice. In many cases, it is simply cheaper to give food away than to throw it out, suggesting that financial and social benefits can align more closely than often assumed.

Timing plays a critical role in maximising value from surplus food. The analysis shows that early price reductions are typically the most profitable strategy. When retailers discount products a few days before their expiry date, they can significantly increase the likelihood of sale. Even modest reductions, such as around 15%, are often enough to convert potential losses into gains, as more items are sold instead of being discarded.

The financial returns from these strategies can be substantial. Across most product categories, discounted sales generate net gains of approximately €0.3 to €0.8 per kilogram, with even higher returns—sometimes exceeding €1.3 per kilogram—for fresh meat, fish, and processed meat products. However, not all items respond equally; liquid dairy products and dry goods are less likely to generate surplus value through price reductions, indicating the need for tailored approaches across product types.

When products are too close to expiry to be sold, donation emerges as the next most cost-effective option. Disposal typically costs retailers between €0.27 and €0.36 per kilogram, while donation costs average €0.14 to €0.23 per kilogram, resulting in meaningful savings. Beyond these direct financial benefits, donation also creates significant social value, with redistributed food contributing an estimated €1 to €5 per kilogram to support vulnerable populations. Overall, the findings demonstrate that reducing food waste and improving profitability are not opposing goals but can, in fact, reinforce one another when managed effectively.

More information: Jørgen Dejgård Jensen, Food Waste Prevention and Economic Incentives to Redistribute Surplus Foods from Food Retailing, Journal of Food Products Marketing. DOI: 10.1080/10454446.2025.2584844

Journal information: Journal of Food Products Marketing Provided by University of Copenhagen

Study Highlights Potential of Climate Aid to Lower Resource Conflict Risks in Developing Countries

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Just as major global powers begin to scale back their climate finance commitments, a new empirical study offers the first clear evidence of a direct relationship between climate finance and a reduced risk of resource-related conflict in developing countries. The findings arrive at a critical moment, suggesting that financial support for climate action may have broader societal benefits beyond environmental outcomes. In particular, the study highlights how targeted investments can contribute to stability in regions where competition over scarce resources has historically fuelled tensions and unrest.

The research shows that climate finance is especially effective when it is directed towards alleviating water stress and expanding renewable energy capacity. These areas are closely tied to basic human needs and economic livelihoods, making them central to both development and conflict prevention. Notably, the study finds a dose-response relationship: the greater the volume of climate finance received, the stronger its peace-promoting effects. This suggests that scaling up such investments could yield compounded benefits for both sustainability and social cohesion.

Previous scholarship has long identified climate change as a contributing factor to conflict, particularly through its impact on resource scarcity, inequality, and social dissatisfaction. However, the role of financial interventions in mitigating these risks has remained less clear, with mixed conclusions across academic fields. This study, published in the peer-reviewed journal Climate Policy, is the first to systematically demonstrate that climate finance can play a meaningful role in reducing the likelihood of conflict tied to resource pressures, offering new clarity in an area of ongoing debate.

Drawing on data from 85 developing countries over more than two decades, the authors define climate finance as international funding aimed at supporting low-carbon and climate-resilient development. Lead author Chin-Hsien Yu of Southwestern University of Finance and Economics explains that such investments are particularly effective in reducing smaller-scale, intra-state conflicts linked to resource competition. He emphasises that funding directed towards social infrastructure not only supports development but also strengthens resilience and wellbeing in vulnerable communities by improving access to essential resources such as water and energy.

The study further finds that increased flows of climate finance are associated with lower incidences of resource-related conflict. Investments in flood defences, water management systems, and climate-resilient agriculture help communities adapt to environmental uncertainty, easing pressures that might otherwise escalate into conflict. Co-author Xinrui Li notes that climate finance does more than support adaptation; it also contributes to peace and stability in fragile regions. These findings suggest that decisions about climate funding should take into account not only environmental goals but also their wider implications for security and governance.

To ensure these benefits are realised, the authors emphasise the importance of directing funds towards regions where climate vulnerability and conflict risk overlap, thereby maximising impact. They also highlight the need for strong governance structures, including meaningful involvement of local communities and marginalised groups, to ensure that projects are effectively implemented. Strengthening recipient countries’ capacity to plan, execute, and monitor initiatives is equally critical, particularly in unstable settings. To reinforce the robustness of their conclusions, the researchers employ a two-stage least squares approach, a widely used econometric method designed to address issues such as reverse causality and omitted variables, lending greater confidence to the study’s findings.

More information: Chin-Hsien Yu et al, Climate finance as a catalyst for peace, Climate Policy. DOI: 10.1080/14693062.2026.2645656

Journal information: Climate Policy Provided by Taylor & Francis Group

AI Pricing Is Changing How Much Each Person Pays

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Artificial intelligence could soon enable powerful companies to charge different customers different prices for the same product, based on predictions about what each individual is willing to pay. That is the warning from new research co-authored by Miroslava Marinova at the University of East London. The study argues that the central concern is not only the potential for higher prices, but the rise of hidden, personalised pricing that consumers cannot easily detect or understand.

Traditionally, firms have set prices in response to broad market forces such as demand, production costs, and competition. In this model, consumers are typically offered similar prices for the same product at any given time, creating a sense of transparency and predictability. While discounts or promotions may vary, the baseline expectation has long been that pricing is broadly consistent across customers.

A different model is now taking shape. Algorithmic personalised pricing uses data-driven systems to tailor prices at the level of the individual consumer. Rather than responding only to overall market demand, these systems aim to estimate how likely a specific person is to accept a higher price instead of searching for alternatives. In effect, pricing decisions become personalised predictions about behaviour rather than general responses to market conditions.

AI systems can draw on vast amounts of data, including browsing history, location, purchasing patterns, and even device usage, to infer willingness to pay. As a result, the same product could be offered at different prices to different individuals at the same time. While forms of price differentiation have existed for years, artificial intelligence significantly increases the precision and scalability of this approach, bringing markets closer to a scenario in which every consumer is quoted a unique price.

The study, co-authored with Christian Bergqvist of the University of Copenhagen, highlights that the most pressing issue may not be price levels themselves but perceptions of fairness. Even if average prices remain stable, consumers tend to react strongly when they discover they are paying more than others without a clear or justified reason. This perceived inequity can erode trust and influence purchasing behaviour in significant ways.

In competitive markets, consumers may still have the option to switch to cheaper alternatives. However, the researchers note that where a dominant firm is involved, personalised pricing could raise legal concerns. In such cases, it may be interpreted as an abuse of market power under existing EU and UK competition law, particularly if the pricing lacks transparency or objective justification. The absence of visibility makes it difficult for consumers to assess whether they are being treated fairly.

The paper concludes that while legal frameworks already contain tools to address these issues, regulation has not yet fully caught up with the capabilities of AI-driven pricing. As these technologies become more widespread, policymakers and regulators will face growing pressure to determine where to draw the line. In the UK, where competition rules closely mirror those of the EU, there are already indications that authorities may expand oversight, including potential new powers for the Competition and Markets Authority to examine algorithmic pricing practices more closely.

More information: Miroslava Marinova et al, AI-Enabled Price Discrimination as an Exploitative Abuse of Dominance under EU Competition Law, Journal of Competition Law & Economics. DOI: 10.1093/joclec/nhag006

Journal information: Journal of Competition Law & Economics Provided by University of East London

Rising Minimum Wages Pose Little Disruption for Small and Medium U.S. Businesses and Their Workforce

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Proposals to raise the minimum wage are frequently accompanied by concerns that independent businesses may be particularly vulnerable to higher labour costs. A new study, “Who’s Afraid of the Minimum Wage? Measuring the Impacts on Independent Businesses Using Matched U.S. Tax Returns,” takes a closer look at this assumption by examining how small and medium-sized firms adjust to wage increases across both product and labour market dimensions. The findings suggest that while firms respond in different ways depending on their size, most are able to adapt effectively, and the overall impact on workers is largely positive.

Conducted by researchers at Carnegie Mellon University and the University of Michigan and published in The Quarterly Journal of Economics, the study contributes to an ongoing policy debate about the real-world consequences of raising wage floors. It builds on a growing body of research suggesting that minimum wage increases do not necessarily lead to widespread job losses, particularly in the short term.

“Although recent research has found that minimum wage increases have had few harmful effects on employment in the short run, fears persist that independent businesses operate on margins too slim to absorb cost increases or face demand too elastic to pass those costs on to consumers,” explains Max Risch, Assistant Professor of Accounting at Carnegie Mellon’s Tepper School of Business and a coauthor of the study. These concerns have often fuelled calls for small business exemptions and broader opposition to raising minimum wages. At the same time, survey evidence shows that independent business owners themselves are divided, with a substantial share expressing support for higher wage floors.

To investigate these dynamics, researchers analysed a comprehensive dataset combining U.S. tax records from 2010 to 2019 with state-level minimum wage changes, alongside information on low-earning and younger workers who may be most affected by wage adjustments. The study examined responses from approximately 217,000 firms across a wide range of outcomes, including employment levels, worker compensation, spending on non-labour inputs, revenues, profits, and patterns of firm entry and exit.

The results indicate that firms in industries most exposed to minimum wage increases, particularly restaurants and retail, generally did not respond by laying off workers. Instead, they made more modest adjustments, such as slightly reducing part-time hiring. Notably, these firms were able to offset higher labour costs through increased revenues, leaving average owner profits largely unchanged. At the same time, higher wage floors did appear to slow the entry of new firms, especially those that were less productive, leading to a modest reduction—around 2 per cent—in the number of independent businesses operating in these sectors. However, rather than shrinking overall, these industries evolved, with stronger, more productive firms continuing to operate and new entrants reflecting a higher level of efficiency.

From the perspective of workers, the findings are broadly encouraging. Average earnings rose significantly following minimum wage increases, without a corresponding decline in overall employment. In fact, worker transitions suggest improved retention, as employees were more likely to remain in their positions. Some reallocation did occur, with workers moving from independent firms to larger corporations, which helped to offset reduced hiring among smaller businesses. “Amid limited understanding of how markets adjust to accommodate wage hikes, our study offers a comprehensive examination of this issue,” says Nirupama L. Rao of the University of Michigan’s Ross School of Business. “Contrary to concerns that such wage increases might imperil small firms, independent businesses demonstrate a notable capacity to adapt.”

More information: Nirupama L Rao et al, Who’s Afraid of the Minimum Wage? Measuring the Impacts on Independent Businesses Using Matched U.S. Tax Returns, The Quarterly Journal of Economics. DOI: 10.1093/qje/qjaf053

Journal information: The Quarterly Journal of Economics Provided by Carnegie Mellon University

Artificial Intelligence Gauges Corporate Complexity

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Warren Buffett once advised that you should never invest in a business you cannot understand. Yet, that principle has not deterred many investors from backing companies whose inner workings remain opaque. In increasingly complex markets, where financial structures and disclosures have grown more intricate, the gap between what investors are told and what they truly comprehend continues to widen. This disconnect has created a demand for better tools that can help interpret and assess the underlying complexity of modern corporations.

New research from the McCombs School of Business offers a promising step in that direction. The study introduces what may be the most precise and comprehensive method yet for measuring business complexity, providing investors and analysts with a clearer lens through which to evaluate corporate structures. By refining how complexity is defined and measured, the research addresses a longstanding challenge in financial analysis: capturing the true depth of a company’s operations beyond surface-level indicators.

The tool, developed by Sara Toynbee, an associate professor of accounting, leverages artificial intelligence to simplify this traditionally difficult task. Rather than relying on crude proxies such as company size or the number of operating segments, the model evaluates complexity from the perspective of an external observer. It asks a straightforward but powerful question: how difficult is it to understand a firm’s financial position and performance based on the information disclosed in its reports? This reframing shifts the focus from structural attributes to interpretive difficulty, offering a more nuanced assessment.

Historically, measuring complexity has been challenging precisely because complexity itself is multifaceted. Conventional metrics often fail to capture deeper layers related to financial instruments, risk exposures, or reporting practices. Toynbee’s approach recognises that complexity does not arise from a single source but can vary widely across firms. Her model addresses this by incorporating 29 distinct categories, including debt, equity, derivatives and hedging, taxation, revenue recognition, and executive compensation. By doing so, it creates a multidimensional profile that reflects how complexity manifests across different aspects of a business.

To build the model, Toynbee collaborated with Darren Bernard, Elizabeth Blankespoor, and Ties de Kok from the University of Washington. Together, they trained a large language model based on Llama 3 using 200,000 sentences drawn from financial statement footnotes. These sentences included embedded iXBRL tags, which provide machine-readable labels describing the meaning of numerical values. By learning to predict what each number represents based on its context, the model effectively mimics the interpretive process of a skilled human reader, but at a vastly greater scale.

After training, the model was applied to more than eight million individual numerical disclosures across over 50,000 corporate reports spanning 2016 to 2024. Each number was assigned a complexity score based on how difficult it was for the model to classify accurately. The less confident the model was in its classification, the higher the inferred complexity. This approach transforms complexity into a measurable, data-driven concept, enabling systematic comparisons across firms and over time. It also reveals patterns that would be nearly impossible to detect through manual analysis alone.

The findings suggest that complexity carries both costs and benefits. On the one hand, higher complexity appears to slow the market’s response to financial disclosures, with stock prices taking longer to adjust as investors process more intricate information fully. On the other hand, complexity can also serve a strategic purpose. In areas such as debt structuring, more complex arrangements, including instruments with non-standard terms like convertibility into equity, can help firms manage risk and stabilise financial outcomes. The research highlights that while excessive complexity may obscure understanding, certain forms can enhance resilience, offering a more balanced perspective on its role in modern business.

More information: Darren Bernard et al, Using GPT to Measure Business Complexity, The Accounting Review. DOI: 10.2308/TAR-2023-0716

Journal information: The Accounting Review Provided by University of Texas at Austin

High-Status MBAs Still Pave the Way to Senior Corporate Positions, Research Indicates

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New research from the University of Bath finds that graduates of elite MBA programmes, particularly the so-called M7 group of super-elite US business schools, are far more likely to rise into top management teams and chief executive roles than peers with non-elite MBAs or no MBA at all. The findings reinforce the enduring influence of prestigious business education in shaping access to the highest levels of corporate leadership in the United States.

The study analysed the careers of more than 106,000 executives working in S&P 500 companies between 2000 and 2018. While the advantages of holding an elite MBA were clear overall, the benefits were not distributed evenly across different groups. Outcomes varied significantly by gender and minority status, and they also shifted in response to broader economic conditions, suggesting that the value of elite credentials is closely tied to context rather than being universally applied.

Professor Mairi Maclean, co-author of the study Elite MBAs in the Making of Top Business Careers, explained that the research was motivated by ongoing questions about the real value of costly business education. With some programmes priced at around $200,000, the team sought to determine whether such an investment genuinely pays off. She concluded that, in terms of reaching the most senior corporate roles, the benefits are substantial, although who gains the most from those benefits is far less straightforward.

The research found that American men consistently derived the greatest advantage from elite MBA qualifications. At the same time, firms appeared more willing to elevate women with elite MBAs during periods of instability, particularly around the Global Financial Crisis of 2008. During such turbulent periods, women experienced faster career progression, suggesting that organisations may broaden leadership selection criteria when facing uncertainty, although these shifts do not always endure.

This pattern aligns with the concept of the Glass Cliff, developed by Professors Michelle Ryan and Alex Haslam, which proposes that women are more likely to be placed in high-risk leadership roles during challenging times. Similar dynamics were observed for minority executives, who also saw increased opportunities during crises. However, once stability returned, organisations often reverted to more traditional leadership patterns, once again favouring American men with elite credentials.

Across the data, the researchers identified recurring organisational behaviours that reflect how companies use elite MBAs in different contexts. In stable periods, these credentials reliably translated into senior appointments for candidates who already matched dominant leadership norms. During crises, firms temporarily expanded opportunities for underrepresented groups, but this inclusion was often partial or symbolic rather than sustained. Once the crisis subsided, many organisations pulled back, reinforcing established hierarchies and limiting long-term gains for women, minorities, and non-US nationals.

Published in the Academy of Management Learning & Education in 2026, the study raises broader questions about fairness and the role of business schools in shaping corporate leadership. Co-author Professor Charles Harvey of Newcastle University noted that while elite MBA programmes remain central to how leadership is constructed, their legitimacy is uneven and highly sensitive to external pressures. The authors argue that business schools should examine whether their admissions processes, networks, and credentialing systems genuinely support lasting inclusion, rather than offering only temporary visibility during periods of disruption.

More information: Mairi Maclean et al, Elite MBAs in the Making of Top Business Careers, Academy of Management Learning and Education. DOI: 10.5465/amle.2024.0437

Journal information: Academy of Management Learning and Education Provided by University of Bath

Sharper Pricing with AI, Softer Returns Due to Consumer Behaviour

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Advances in big data, artificial intelligence, and sophisticated pricing algorithms have made it easier than ever for firms to fine-tune prices at a highly detailed level, aligning closely with the specific costs and perceived value of individual products. The dominant assumption has been straightforward: better data, more powerful algorithms, and sharper segmentation should naturally translate into stronger profits. However, new research suggests that increasingly granular pricing is not always the optimal approach. In many cases, firms may achieve better financial outcomes by limiting the number of price points rather than expanding them.

This idea is explored in the study “Consumer-Driven Class Pricing” by Zuhui Xiao from the University of Wisconsin-Milwaukee. The research focuses on class pricing, a common yet often overlooked strategy in everyday markets. Class pricing involves assigning a relatively small set of prices to a much larger assortment of related products. For example, a bar may offer a wide selection of draft beers but only a few pricing tiers, while a supermarket might stock hundreds of products but display a limited number of shelf prices. Similar patterns appear across industries, including fast-moving consumer goods, restaurants, discount retail, convenience stores, travel, books, and car rentals.

The logic behind class pricing extends beyond convenience or operational simplicity. It is rooted in how consumers interpret and evaluate prices. Rather than assessing each price independently, shoppers tend to form expectations based on the range of products presented to them. They compare prices across similar items and judge whether what they are paying feels fair relative to nearby alternatives. In this context, pricing becomes a comparative experience shaped by expectations rather than a purely objective calculation.

A central concept driving this behaviour is loss aversion. Consumers are generally more sensitive to perceived losses than to equivalent gains. This means that paying more than expected creates a stronger negative reaction than the positive feeling generated by paying less than expected. As a result, when firms introduce more finely differentiated pricing, they may inadvertently intensify these comparisons and heighten negative perceptions, particularly for higher-priced items.

“When firms introduce more granular pricing, it triggers consumers’ direct comparison of prices,” Xiao explains. “Consumers perceive higher-priced items as losses relative to cheaper alternatives and tend to resent higher prices more than they reward lower ones.” This dynamic amplifies the perceived disadvantage of premium products, making them seem less appealing than their underlying value would suggest. Even when these products offer higher quality, better features, or greater prestige, the psychological impact of price comparisons can undermine their attractiveness.

Because of this imbalance, firms often face a difficult trade-off. They may be unable to raise prices on premium products enough to reflect their full value, while still needing to keep lower-priced options sufficiently inexpensive to attract demand. This asymmetry reduces overall profitability, as firms give up more on the lower end than they gain on the higher end. The findings challenge the assumption that more pricing precision is always beneficial. Even with advanced technologies, simpler and more carefully structured pricing systems may ultimately deliver stronger results.

More information: Zuhui Xiao et al, Consumer-Driven Class Pricing, Marketing Science. DOI: 10.1287/mksc.2023.0133

Journal information: Marketing Science Provided by Institute for Operations Research and the Management Sciences

Scorching Shifts: Study Investigates How Heat Is Influencing Where Americans Live

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As extreme heat intensifies across the United States, it is often assumed that rising temperatures will drive people to relocate. However, new research from Florida Atlantic University challenges that expectation, suggesting that heat alone is not yet prompting large-scale population departures. Instead, the study indicates that while higher temperatures may reduce the appeal of certain regions to prospective newcomers, they are not causing widespread out-migration. The findings point to a more nuanced reality in which climate plays a role, but not the dominant one many anticipate.

Drawing on county-level data across the contiguous United States, including IRS migration records from 2020 to 2022, U.S. Census data, and climate indicators from National Oceanic and Atmospheric Administration and the Centers for Disease Control and Prevention, researchers examined how temperature changes influence migration patterns. Their analysis reveals that rising heat is more likely to slow population growth in certain areas by discouraging in-migration rather than forcing residents to leave. In other words, places are becoming less attractive rather than actively pushing people out.

The study, published in Sustainability, finds that economic opportunity, housing affordability, and overall quality of life remain the primary drivers of where people choose to live. Counties with strong labour markets, lower housing costs, and desirable amenities continue to attract residents despite increasing temperatures. Meanwhile, population decline in other regions appears more closely tied to longstanding economic and demographic trends than to climate conditions alone. Many counties still experience net population gains, particularly in rapidly growing Sun Belt regions such as Florida, Texas, and Arizona, even as these areas face some of the most pronounced temperature increases.

An important dimension highlighted by the research is the concept of immobility. Rather than relocating in response to gradual climate stress, many individuals remain in place, either by adapting to changing conditions or because financial and structural barriers limit their ability to move. This raises concerns about the emergence of “trapped populations,” particularly in lower-income communities where resources to respond to environmental change are more constrained. In these contexts, vulnerability to heat may intensify without corresponding shifts in population.

The temperature change itself is uneven across the country. On average, U.S. counties experienced an increase of approximately 1.9°F between 2017 and 2021 compared with a 1901–2000 baseline, though local variation ranges from slight cooling to increases exceeding 3.7°F. Hundreds of counties have already experienced warming above 2.6°F, with some surpassing 3°F. The most significant increases are concentrated in parts of the Southwest, Southeast, and Northeast, as well as specific counties in Colorado and Ohio. Despite these variations, migration patterns remain relatively stable at lower to moderate levels of warming, with only modest shifts emerging at higher temperature thresholds.

The researchers caution that current trends do not preclude stronger climate-driven migration in the future. As rising temperatures interact with extreme weather events, prolonged exposure, housing constraints, and insurance pressures, more pronounced population shifts could emerge. The findings suggest that policymakers should prioritise strengthening resilience in place rather than preparing for immediate large-scale migration. Investments in heat-resilient housing, infrastructure, and support for vulnerable populations will be critical, as the interplay between climate, economic conditions, and social inequality continues to shape how and where people live.

More information: Yanmei Li et al, Temperature Anomaly and Residential Mobility: Spatial Patterns, Tipping Points, and Implications for Sustainable Adaptation, Sustainability. DOI: 10.3390/su18042040

Journal information: Sustainability Provided by Florida Atlantic University

Global food supply shaken by US-Israel-Iran war, with tens of millions at risk of severe poverty, report reveals

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The war involving the United States, Israel, and Iran is threatening food security far beyond the Middle East, placing millions at risk worldwide, according to new research published in Global Food Security. While a fragile ceasefire has temporarily halted the violence that erupted on 28 February, the underlying tensions remain unresolved. Central to the crisis is Iran’s attempt to restrict trade and oil flows through the Strait of Hormuz, alongside a US blockade of Iranian ports—developments that continue to disrupt global supply chains.

Researchers from the University of Sharjah warn that instability in the Strait of Hormuz—a vital artery for global energy—has sharply increased energy prices, triggering cascading disruptions across food systems. Regions such as the Middle East and North Africa (MENA) and East Africa, already facing chronic vulnerability, are particularly exposed. However, the effects are not confined to these areas; the study emphasises that no country is fully insulated from the ripple effects of such geopolitical shocks.

The Strait of Hormuz is a critical chokepoint through which roughly one-fifth of global petroleum and liquefied natural gas supplies pass each day. Its disruption raises fertiliser costs—given their reliance on natural gas—while also increasing expenses tied to food processing, refrigeration, and transportation. The result is a chain reaction that pushes up food prices and undermines food security on a global scale.

The study finds that the war has also driven up maritime insurance premiums and fuelled speculative surges in commodity prices. These pressures erode household purchasing power, particularly in low- and middle-income countries, and weaken both the availability and quality of food. Lead author Farah Naja explains that the impacts extend across the entire food supply chain, from production to consumption, with severe consequences for populations already experiencing food shortages.

At the production level, the conflict is driving up costs in multiple ways. Fertiliser prices have surged, with urea rising significantly above pre-war levels, while key exporters in the conflict zone face disruptions. Higher energy costs make it more expensive to process, store, and transport food, ultimately leading to higher retail prices. These combined pressures disproportionately affect the most vulnerable populations, increasing the risk of hunger and malnutrition.

The research also highlights a shift in dietary patterns as economic strain intensifies. As food becomes more expensive, households tend to reduce spending on nutritious items such as fruits, vegetables, and protein-rich foods, instead turning to cheaper, calorie-dense alternatives. This shift may not immediately result in visible hunger but contributes to long-term health consequences, particularly for children and pregnant women, where nutritional deficiencies can cause lasting developmental harm.

Drawing on lessons from past crises—including the 2007–08 food price spike, the COVID-19 pandemic, and the Russia-Ukraine war—the study argues that the tools to mitigate such impacts already exist. It calls for coordinated action at the household, national, and international levels, emphasising the importance of proactive measures such as strategic reserves, social protection systems, and stronger global cooperation. Without timely intervention, the authors warn, the costs of inaction will fall most heavily on those already facing the greatest food insecurity.

More information: Farah Naja et al, Food security amid the US Iran war: a food system analysis and a framework for coordinated multilevel action, Global Food Security. DOI: 10.1016/j.gfs.2026.100919

Journal information: Global Food Security Provided by University of Sharjah

Can We Rely on the Science That Shapes Our World?

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Published in Nature, this investigation led by Abel Brodeur, a professor at the University of Ottawa, emerged alongside a sweeping seven-year international effort examining whether academic findings endure over time—particularly in fields lacking a standardised measure of scientific credibility. That broader initiative, the Systematizing Confidence in Open Research and Evidence (SCORE) project, assessed nearly 4,000 social-science papers and concluded that roughly half of the tested studies could not be successfully replicated, underscoring ongoing concerns about the reliability of published research.

Against this backdrop, Brodeur’s own work offers a more hopeful perspective. While the SCORE findings highlighted structural weaknesses in reproducibility across the social sciences, his study suggests that more recent research practices may be moving in a positive direction. Rather than reinforcing scepticism, his results point to tangible improvements in transparency and methodological rigour, especially within certain disciplines and publication environments.

Brodeur adopted a dual methodological approach, organising focused replication exercises conducted during single-day events between 2022 and 2023. Through this process, his team examined 110 published articles, ultimately finding that approximately 85 per cent were computationally reproducible. This figure stands in notable contrast to earlier replication rates and provides a degree of reassurance at a time when public confidence in scientific evidence is under strain.

Reflecting on these findings, Brodeur emphasises that the study contributes to a growing body of systematic, large-scale evidence regarding the reliability of social science research. He argues that its immediate impact lies in reinforcing the importance of stronger research practices, including improved coding standards, more consistent data sharing, and greater overall transparency. These measures, he suggests, can help identify and correct errors before they influence policy decisions. Over the longer term, such openness may also rebuild trust in science by demonstrating its capacity for self-correction and accountability.

A key distinction between Brodeur’s work and the earlier SCORE project lies in the evolution of disclosure practices. His analysis indicates that more recent studies—particularly those published after 2018—are more likely to include accessible data and code, reflecting a shift towards open science norms. Brodeur contends that reproducing original research should become a routine expectation rather than an exceptional exercise. He further recommends that future studies draw broader conclusions by examining random samples of papers from journals with varying data-sharing policies, thereby providing a more comprehensive view of reproducibility across the academic landscape.

Beyond methodological considerations, Brodeur highlights the broader implications for equity and access within the research community. The increased availability of data, code, and open-source tools can democratise participation in scientific inquiry, enabling researchers from less well-resourced institutions or regions to engage more fully with cutting-edge work. In this sense, open science is not merely a technical improvement but a structural shift with the potential to reshape who can contribute to—and benefit from—academic knowledge. As reliance on research continues to grow in both public policy and everyday decision-making, such changes may play a critical role in strengthening both the credibility and inclusiveness of the scientific enterprise.

More information: Abel Brodeur et al, Reproducibility and robustness of economics and political science research, Nature. DOI: 10.1038/s41586-026-10251-x

Journal information: Nature Provided by University of Ottawa