This article examines the impact of customer reward programs on the competitive outcome in duopolistic markets. We argue that loyalty discounts for repeat customers constitute a commitment device beneficial to suppliers rather than customers. Analyzing a two-period Bertrand model we show that...

Thankfully, most product consumption experiences are positive. Unfortunately, however, those positive experiences are not always guaranteed to occur, and defects creep into the consumer experience. Though its assertion runs counter to most prescriptions, the current research proposes that...