search query: @author Shi, M. / total: 8
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| Author: | Kim, B.-D. Shi, M. Srinivasan, K. |
| Title: | Reward Programs and Tacit Collusion |
| Journal: | Marketing Science
2001 : VOL. 20:2, p. 99-120 |
| Index terms: | MARKETING SEGMENTATION PRICES |
| Language: | eng |
| Abstract: | The authors study a market that consists of two segments: heavy-and light-user segments. Our model closely examines the type of rewards. A reward worth a dollar to the consumer might have different cost implications for the offering firm, depending on the type of reward. Specifically, we examine an interesting puzzle observed in the marketplace. We examine whether there is any reason for such a seemingly suboptimal practice. The authors' analysis shows that reward programs weaken price competition. The authors offer an explanation as to why the type and amount of reward may vary across the programs. They identify two determining factors for the selection of rewards: size and relative price sensitivity of the heavy- user segment. |
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