TY  - BOOK
AU  - Bagchi,Rajesh
AU  - Li,Xingbo
TI  - Illusionary progress in loyalty programs: magnitudes, reward distances, and step-size ambiguity 
SN  - 00935301
AV  - HF5415.3 JOU 
PY  - 2013///
CY  - Oxford
PB  - Oxford University Press
KW  - Loyalty program
KW  - Information value
KW  - Consumer behaviour
N2  - Loyalty programs offer rewards via mediums of different magnitudes (e.g., “$6 off when you accumulate 1,000 [100] points. Earn 10 [1] points/dollar”). The program medium presents two key pieces of information: reward distance (points required to redeem reward) and step size (points earned per dollar). In higher-magnitude (vs. lower-magnitude) programs, both reward distances (1,000 vs. 100) and step sizes (10 vs. 1 point[s]/dollar) are larger. How do these two pieces of information affect consumers' postenrollment inferences of progress, store loyalty, and recommendation likelihood? Do consumers always integrate both pieces? We identify a moderator, step-size ambiguity, and show that when ambiguity is high, only reward distance affects inferences. When ambiguity is lower, consumers integrate step size with reward distance, but in a biased manner. Implications arise in goal following and in physical and psychological distance estimation contexts (e.g., weight loss, savings) where distances and step sizes can vary (e.g., as a function of units: kilograms vs. pounds), but especially in loyalty rewards contexts
UR  - https://doi.org/10.1086/656392
ER  -