Loyalty Currency and Mental Accounting: Do Consumers Treat Points Like Money?

References

• Altman D, Yom-Tov GB, Olivares M, Ashtar S, Rafaeli A (2021) Do customer emotions affect agent speed? An empirical study of emotional load in online customer contact centers. Manufacturing Service Oper. Management 23(4):854–875.Link, Google Scholar
• American Airlines (2015, 2019) American Airlines Annual Reports. Accessed June 20, 2024, https://americanairlines.gcs-web.com/financial-results/financial-aal.Google Scholar
• Arslan HA, Easley RF, Wang R, Yilmaz Ö (2021) Data-driven sports ticket pricing for multiple sales channels with heterogeneous customers. Manufacturing Service Oper. Management 24(2):1241–1260.Link, Google Scholar
• Bandiera O, Fischer G, Prat A, Ytsma E (2021) Do women respond less to performance pay? Building evidence from multiple experiments. Amer. Econom. Rev. Insights 3(4):435–454.Crossref, Google Scholar
• Baron O, Deng C, He S, Yuan H (2024) Forecasting using reference prices with exposure effect. Naval Res. Logist. Forthcoming.Crossref, Google Scholar
• Basumallick D, Ozdaryal B, Madamba-Brown C (2013) Perceived value of a mile. J. Revenue Pricing Management 12:8–15.Crossref, Google Scholar
• Ben-Akiva M, Lerman SR (1985) Discrete Choice Analysis: Theory and Application to Travel Demand (The MIT Press, Cambridge, MA).Google Scholar
• Bijmolt THA, Dorotic M, Verhoef PC (2010) Loyalty programs: Generalizations on their adoption, effectiveness and design. Foundations Trends Marketing 5(4):197–258.Crossref, Google Scholar
• Breugelmans E, Bijmolt THA, Zhang J, Basso LJ, Dorotic M, Kopalle P, Minnema A, Mijnlieff WJ, Wünderlich NV (2015) Advancing research on loyalty programs: A future research agenda. Marketing Lett. 26:127–139.Crossref, Google Scholar
• Buell RW (2021) Last-place aversion in queues. Management Sci. 67(3):1430–1452.Link, Google Scholar
• Carluccio J, Eizenman O, Rothschild P (2021) Next in loyalty: Eight levers to turn customers into fans. McKinsey & Company (October 21), https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/next-in-loyalty-eight-levers-to-turn-customers-into-fans.Google Scholar
• Carrera C, Sosa M, Martínez-de-Albéniz V (2024) The bright side of lower quality: Evidence from restaurant exploration. Working paper, INSEAD, Fontainebleau, France.Google Scholar
• Chun SY, de Boer E (2021) How loyalty programs are saving airlines. Harvard Bus. Rev. (April 2), https://hbr.org/2021/04/how-loyalty-programs-are-saving-airlines.Google Scholar
• Chun SY, Hamilton R (2024) Paying with money or paying with points: How variable vs. fixed exchange rates influence loyalty point redemption. J. Marketing Res. Forthcoming.Crossref, Google Scholar
• Chun SY, Iancu DA, Trichakis N (2020) Loyalty program liabilities and point values. Manufacturing Service Oper. Management 22(2):257–272.Link, Google Scholar
• Chung K (2020) Incorporating a “better” behavioral bias for both consumers and firms in rebate programs. Management Sci. 66(4):1627–1646.Link, Google Scholar
• Delta Air Lines (2020) Delta Air Lines Form 10-K. Accessed June 20, 2024, https://ir.delta.com/financials/sec-filings/sec-filings-details/default.aspx?FilingId=14706066.Google Scholar
• Dorotic M, Verhoef PC, Fok D, Bijmolt THA (2014) Reward redemption effects in a loyalty program when customers choose how much and when to redeem. Internat. J. Res. Marketing 31(4):339–355.Crossref, Google Scholar
• Drèze X, Nunes JC (2004) Using combined-currency prices to lower consumers’ perceived cost. J. Marketing Res. 41(1):59–72.Crossref, Google Scholar
• Dudoit S, Fridlyand J (2003) Bagging to improve the accuracy of a clustering procedure. Bioinformatics 19(9):1090–1099.Crossref, Google Scholar
• Economist (2005) Frequent flyer miles: In terminal decline. The Economist (January 6), https://www.economist.com/leaders/2005/01/06/in-terminal-decline.Google Scholar
• Epley N, Mak D, Idson LC (2006) Bonus of rebate?: The impact of income framing on spending and saving. J. Behav. Decis. Making 19(3):213–227.Crossref, Google Scholar
• Erdem T, Mayhew G, Sun B (2001) Understanding reference-price shoppers: A within- and cross-category analysis. J. Marketing Res. 38(4):445–457.Crossref, Google Scholar
• Ertekin N, Ketzenberg ME, Heim GR (2020) Assessing impacts of store and salesperson dimensions of retail service quality on consumer returns. Production Oper. Management 29(5):1232–1255.Crossref, Google Scholar
• Gelman A (2006) Prior distributions for variance parameters in hierarchical models. Bayesian Anal. 1(3):515–533.Crossref, Google Scholar
• Gelman A, Hill J (2006) Data Analysis Using Regression and Multilevel/Hierarchical Models (Cambridge University Press, Cambridge, UK).Crossref, Google Scholar
• Gelman A, Jakulin A, Pittau MG, Su YS (2008) A weakly informative default prior distribution for logistic and other regression models. Ann. Appl. Statist. 2(4):1360–1383.Crossref, Google Scholar
• Gelman A, Carlin JB, Stern HS, Dunson DB, Vehtari A, Rubin DB (2013) Bayesian Data Analysis (Chapman and Hall/CRC, Boca Raton, FL).Crossref, Google Scholar
• George EI, Ročková V, Rosenbaum PR, Satopää VA, Silber JH (2017) Mortality rate estimation and standardization for public reporting: Medicare’s Hospital Compare. J. Amer. Statist. Assoc. 112(519):933–947.Crossref, Google Scholar
• Hanley JA, McNeil BJ (1982) The meaning and use of the area under a receiver operating characteristic (ROC) curve. Radiology 143(1):29–36.Crossref, Google Scholar
• Hastie T, Tibshirani R, Friedman J (2009) The Elements of Statistical Learning (Springer, New York).Crossref, Google Scholar
• Hsu T (2019) Why rewards for loyal spenders are ‘a honey pot for hackers’. New York Times (May 11), https://www.nytimes.com/2019/05/11/business/rewards-loyalty-program-fraud-security.html.Google Scholar
• Huckman RS, Staats BR, Upton DM (2009) Team familiarity, role experience, and performance: Evidence from Indian software services. Management Sci. 55(1):85–100.Link, Google Scholar
• Keppler SM, Li J, Wu D (2022) Crowdfunding the front lines: An empirical study of teacher-driven school improvement. Management Sci. 68(12):8809–8828.Link, Google Scholar
• Kopalle PK, Sun Y, Neslin SA, Sun B, Swaminathan V (2012) The joint sales impact of frequency reward and customer tier components of loyalty programs. Marketing Sci. 31(2):216–235.Link, Google Scholar
• KPMG (2022) IFRS 15 Handbook (KPMG, UK).Google Scholar
• Lu Y, Musalem A, Olivares M, Schilkrut A (2013) Measuring the effect of queues on customer purchases. Management Sci. 59(8):1743–1763.Link, Google Scholar
• Mayhew GE, Winer RS (1992) An empirical analysis of internal and external reference prices using scanner data. J. Consumer Res. 19(1):62–70.Crossref, Google Scholar
• Mazumdar T, Raj SP, Sinha I (2005) Reference price research: Review and propositions. J. Marketing 69(4):84–102.Crossref, Google Scholar
• McElreath R (2020) Statistical Rethinking: A Bayesian Course with Examples in R and Stan (Chapman and Hall/CRC, Boca Raton, FL).Crossref, Google Scholar
• McFadden D (1973) Conditional logit analysis of qualitative choice behavior. Zarembka P, ed. Frontiers of Econometrics (Academic Press, New York), 105–142.Google Scholar
• Milkman KL, Beshears J (2009) Mental accounting and small windfalls: Evidence from an online grocer. J. Econom. Behav. Organ. 71(2):384–394.Crossref, Google Scholar
• Norton MI, Mochon D, Ariely D (2012) The IKEA effect: When labor leads to love. J. Consumer Psych. 22(3):453–460.Crossref, Google Scholar
• Orhun AY, Guo T, Hagemann A (2022) Reaching for gold: Frequent-flyer status incentives and moral hazard. Marketing Sci. 41(3):548–574.Link, Google Scholar
• Özer O, Sul I, Şimşek AS (2022) Damned if you buy, damned if you wait: An empirical investigation of customer regret under markdown pricing. Working paper, Amazon, USA.Google Scholar
• Rossi PE, Allenby GM, McCulloch R (2005) Bayesian Statistics and Marketing (John Wiley & Sons, Ltd, Hoboken, NJ).Crossref, Google Scholar
• Schlangenstein M, Bachman J (2019) Airlines want you to burn your miles. Bloomberg (March 5), https://www.bloomberg.com/news/articles/2019-03-05/airlines-want-you-to-burn-your-miles.Google Scholar
• Soman D (2001) Effects of payment mechanism on spending behavior: The role of rehearsal and immediacy of payments. J. Consumer Res. 27(4):460–474.Crossref, Google Scholar
• Southwest (2010, 2019) Southwest Airlines Annual Reports. Accessed June 20, 2024, https://www.southwestairlinesinvestorrelations.com/financials/company-reports/annual-reports.Google Scholar
• Stan Development Team (2024) Stan modeling language users guide and reference manual, 2.34. Accessed June 20, 2024, https://mc-stan.org/users/documentation/.Google Scholar
• Stourm V, Bradlow ET, Fader PS (2015) Stockpiling points in linear loyalty programs. J. Marketing Res. 52(2):253–267.Crossref, Google Scholar
• Tan TF, Netessine S (2019) When you work with a superman, will you also fly? An empirical study of the impact of coworkers on performance. Management Sci. 65(8):3495–3517.Link, Google Scholar
• Tereyağoğlu N, Fader PS, Veeraraghavan S (2018) Multiattribute loss aversion and reference dependence: Evidence from the performing arts industry. Management Sci. 64(1):421–436.Link, Google Scholar
• Thaler RH (1985) Mental accounting and consumer choice. Marketing Sci. 4(3):199–214.Link, Google Scholar
• Thaler RH (1999) Mental accounting matters. J. Behav. Decis. Making 12(3):183–206.Crossref, Google Scholar
• Tversky A, Kahneman D (1992) Advances in prospect theory: Cumulative representation of uncertainty. J. Risk Uncertainty 5:297–323.Crossref, Google Scholar
• Vehtari A, Gelman A, Gabry J (2017) Practical Bayesian model evaluation using leave-one-out cross-validation and WAIC. Statist. Comput. 27:1413–1432.Crossref, Google Scholar
• Watanabe S (2010) Asymptotic equivalence of Bayes cross validation and widely applicable information criterion in singular learning theory. J. Mach. Learn. Res. 11(116):3571–3594.Google Scholar
• Yu Q, Allon G, Bassamboo A (2017) How do delay announcements shape customer behavior? An empirical study. Management Sci. 63(1):1–20.Link, Google Scholar