The Paradox of Points

Download or read book The Paradox of Points written by Sören Köcher and published by Springer. This book was released on 2015-04-14 with total page 179 pages. Available in PDF, EPUB and Kindle. Book excerpt: In his research, Sören Köcher provides valuable insights on the paradoxical effects of the magnitude of a loyalty program medium—i.e. the sheer number of points, miles, or stamps credited for every purchase and required for reward redemption—on the central consumer decisions in loyalty program memberships. In sum, the results of twelve empirical studies reveal that high magnitude currencies improve the attractiveness of medium collection but entail reluctant medium spending behavior. These findings provide important implications for a more efficient usage of loyalty programs in business practices. In addition, this dissertation discovers a violation of one of the most fundamental assumptions of rational choice theory and thus contributes to a better understanding of when and why people deviate from rational decision-making.