In 1962, a former Stanford MBA student named Phil Knight wrote a master's thesis arguing that Japanese running shoes could disrupt the American athletic-footwear market the same way Japanese cameras had disrupted Leica. His professor gave him a polite grade and presumably forgot about it.
Two years later, Knight and his old University of Oregon track coach Bill Bowerman put $500 each into a company called Blue Ribbon Sports. They started by selling Onitsuka Tiger running shoes out of the trunk of Knight's Plymouth Valiant at high-school track meets.
Sixty years later that company — renamed Nike — is worth somewhere north of $165 billion.
If you want to understand how that happened, read Phil Knight's memoir Shoe Dog, which is genuinely one of the best business books of the last decade. But the short version, the version that matters for behavioral economics, is that Nike built its empire on three stacked psychological biases — none of which Knight or Bowerman had a name for at the time, but all of which they intuited with eerie precision.
Authority. Parasocial Relationships. Halo Effect.
Modern influencer marketing is essentially Nike's playbook applied at scale, which makes it worth understanding what the original move actually was.
The Waffle Iron and the Dead Runner
The Nike origin story everyone knows is the waffle iron. Bowerman, obsessed with shaving fractions of a second off his runners' times, allegedly poured liquid urethane into his wife's waffle iron one morning and ruined the appliance but invented the textured sole that became Nike's first signature shoe. The story is mostly true. The waffle iron is in a museum in Beaverton, Oregon.
The story almost nobody outside the running world knows is the dead runner.
Steve Prefontaine — "Pre" to everyone who watched him — was the first athlete Nike ever signed. He was also Bowerman's protégé at Oregon, an Olympic distance runner, and a generational talent. Pre wasn't just a runner. He was the spirit of running in 1970s America. He raced like he had something to prove on every lap. He turned what had been a fringe sport into something people wanted to be.
And in May 1975, at age 24, Pre died in a single-car accident in Eugene, Oregon. Drunk. Coming home from a party. Driving an MG that flipped on a side street.
The behavioral economics part isn't that Pre died. It's that the Nike brand, in the years that followed, didn't pivot away from him. They built the brand around him. Around his memory, his ethic, his almost-religious approach to running as a moral practice. When you ran in Nikes in 1976, you were running in the shoes Pre wore. You were, for a moment, inheriting something.
This was Authority Bias before anyone in marketing was using the term.
Authority Bias (And Why It's Older Than You Think)
Authority Bias is the well-replicated psychological finding that humans defer to perceived experts even when the expert's actual credentials are flimsy. Robert Cialdini covers it as one of the six core principles in Influence. The classic research goes back to Stanley Milgram's obedience experiments at Yale in 1961 — the same Milgram who's famous for the electric-shock experiments. Milgram was studying how easily people defer to lab-coat authority, but the underlying mechanism — price someone's judgment higher because of perceived expertise — generalizes.
In Nike's case, the move was deceptively simple. Get the shoes onto the feet of runners other runners look up to. Phil Knight described the entire early marketing strategy this way in a 1992 Harvard Business Review interview: "We just tried to get our shoes on the feet of runners." That sentence is the operational summary of forty years of behavioral economics translated into a single tactical instruction.
It's also the exact same mechanism modern influencer marketing runs on, except modern influencer marketing typically gets it wrong by mistaking reach for authority. Pre wasn't famous outside the running community. He had Authority within it. Nike spent decades borrowing that authority and never confusing it with the larger, shallower variable of celebrity reach.
If you've read Byron Sharp's How Brands Grow, you'll recognize a related argument from a different angle: mental availability is built by salient associations, not by sheer celebrity. Sharp would frame Pre as a salience anchor, not an authority signal. Both framings work. Both arrive at the same operational conclusion.
Parasocial Relationships: A 1956 Paper That Explains Modern Influencer Marketing
In 1956, two sociologists named Donald Horton and R. Richard Wohl published a paper in the journal Psychiatry called "Mass Communication and Para-Social Interaction." The paper introduced the term parasocial relationship — a one-sided emotional bond a viewer forms with a media figure who doesn't know them back.
Horton and Wohl were writing about television. They observed that audiences were forming the same kind of emotional attachments to TV personalities — Edward R. Murrow, Lucille Ball — that they had previously formed only with neighbors, friends, and family. The relationship was strictly one-way: Lucy didn't know you existed, but you felt like you knew Lucy.
If you transplant this framework forward sixty years to TikTok, YouTube, Instagram, Twitch, it is the exact same mechanism. A 24-year-old in a small town watching a fitness creator they've never met for two hours a day is in a parasocial relationship with that creator. They feel they know them. They trust their product recommendations the way they'd trust a close friend's.
Nike caught this wave early and rode it expertly. The 1984 partnership with Michael Jordan — a deal that's so consequential it's been the subject of a feature film (Air, 2023) and roughly seventeen books — was a near-perfect application of the Parasocial principle. Jordan wasn't Nike's first choice; Nike wasn't Jordan's first choice either. (Adidas was his preference; his mother, Deloris Jordan, talked him into taking Nike's meeting.) But what Nike correctly bet on was that if Jordan became a cultural phenomenon, the parasocial dynamic would do the work. Fans wouldn't just admire Jordan from a distance. They'd feel an emotional bond strong enough to translate into commerce.
The Jordan brand is now worth somewhere over $10 billion as a standalone business. Roughly a million parasocial relationships, each priced at $10,000 of lifetime shoe purchases.
A 2020 study in the Journal of Marketing Research found that the strength of a viewer's parasocial bond with an influencer was the single strongest predictor of whether they'd purchase a product the influencer endorsed — stronger than the influencer's follower count, the production value of the post, or the product's intrinsic appeal. Reach is overrated. Bond strength is the variable.
The Halo Effect: Edward Thorndike, 1920
The third bias in Nike's stack is the Halo Effect, which has a much older academic genealogy than most people realize.
Edward Thorndike, a Columbia psychologist, was studying how military officers rated their soldiers in 1920. He noticed something strange. An officer who rated a soldier highly on physique tended to rate the same soldier highly on intelligence, leadership, and loyalty — even though these traits should have been statistically independent. The ratings were heavily correlated in ways no underlying reality could justify. Thorndike published the finding in a paper called "The Constant Error in Psychological Ratings."
The Halo Effect, in plain English: one strongly positive feature of a person or product spills over into how we judge every other feature. Attractive people are perceived as more intelligent, more honest, more competent. Tall people get more promotions. Apple's beautiful packaging makes its software feel more reliable.
Michael Lewis tells a great story about this in The Undoing Project. Daryl Morey, then GM of the Houston Rockets, had to train himself not to let the Halo Effect of an unusually tall, charming basketball player corrupt his statistical evaluation of the player. Lewis quotes Morey: "Extremely tall people had an unusual capacity to charm. He needed to fight whatever he felt during them — especially if he and everyone else in the room felt charmed."
The Jordan effect on Nike sales was the Halo Effect at peak intensity. Jordan's talent, charm, and dominance on the court created an aura that bled directly into every product the Nike brand touched. Customers weren't really buying shoes. They were buying a slice of Jordan-ness.
Daniel Kahneman covers this at length in Thinking, Fast and Slow, treating the Halo Effect as one of the cleanest illustrations of System 1 thinking. Your fast, intuitive brain doesn't run independent assessments of each attribute. It runs a single global judgment and lets it color everything.
The "No Products" Move
There's a famous Steve Jobs internal speech from 1997, just after he returned to Apple, in which he tells his team that Nike's marketing genius is summed up in two words: "No products."
Jobs's point — and you can find the clip on YouTube — is that Nike almost never sells you the shoe in their advertising. They sell you the feeling of being someone who runs. They sell determination, sweat, defeat, redemption. The shoe is incidental to the emotional payload.
This is what behavioral economists call emotional salience. Emotional content gets remembered. It gets attended to. It gets acted on. Phil Barden in Decoded walks through fMRI evidence that emotionally salient marketing activates the brain's reward and memory circuits in ways that purely rational marketing cannot. David Ogilvy was making the same argument forty years earlier in Ogilvy on Advertising — consumers don't buy products, they buy implied identities — though the neuroscience has now caught up.
The "Just Do It" tagline that anchored this strategy has a darker origin most people don't know. Dan Wieden, the creative director who founded Wieden+Kennedy, has said in interviews that the line was partly inspired by the last words of executed murderer Gary Gilmore, who told the Utah firing squad in 1977, "Let's do it." Wieden adapted the phrase. The original line is one of the most macabre etymologies in advertising history. Most consumers never hear about it. The tagline does its work without needing them to.
What I Take From All This
Nike is the cleanest demonstration I can think of that great brands are built by stacking multiple behavioral biases, not by exploiting any single one.
Authority got Nike onto the feet of the people whose footwear choices other people copied. Parasocial Relationships made customers feel an emotional bond with athletes they would never meet. The Halo Effect let those athletes' attributes — Jordan's talent, Pre's spirit, Serena's fire — bleed into how the shoes themselves were perceived. And emotional salience made the advertising memorable enough to compound all three biases over decades.
Modern influencer marketing usually picks one of these and tries to scale it in isolation. That's why most of it doesn't work. A creator with 2 million followers but no real authority in your category will not move product. A celebrity endorsement that doesn't trigger parasocial bonding will not move product. A halo without underlying authority will not move product.
Nike's playbook is to stack all three, anchor them in emotional storytelling, and run it for decades.
That's the formula. Sixty years and $165 billion later, it's still working.