The probability of income loss depends on talent and effort. Effort has positive externalities and therefore individuals are proportion to their perceived diligence. The social norm requires more effort from individuals perceived as more talented, but talent is private information and...

We study whether and how frequent-flyer program members change their purchase behaviors as they progress towards achieving elite status. We find that as travelers stretch to attain status with the airline, they become more likely to choose it even when it is less appealing than its competitors....