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in prices of add ons. Using 10 years of extended warranty data from a nationwide Canadian retailer, we show that extended … warranty prices respond strongly to changes in local economic activity whereas prices of underlying durable goods do not. The … procyclicality is driven by a shift in price setting behavior, where local stores use extended warranty discounts to make base …
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Frequent Flier Programs (FFPs) are said to impact airline consumer behaviour such that revenue of sponsoring airlines increases. Prior research relies on aggregate industry data to study FFPs. We examine the impact of FFPs on individual consumer behaviour in a quasi-natural experimental set-up...
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How do customer loyalty programs create switching costs? We estimate the demand effects of tier levels within a frequent flier program by exploiting discrete tier thresholds. We have two main results. First, members increase demand to reach a higher tier level just before the end of the calendar...
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Many empirical studies on intertemporal choice report preference reversals in the sensethat a preference between a small reward to be received soon and a larger reward to bereceived later reverses as both rewards are equally delayed. Such preference reversals arecommonly interpreted as...
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