The impact of customer boredom on the efficacy of a rewards program
In this paper, we study utilizing a game theoretic model, how variety seeking triggered by customer boredom may affect a firm’s rewards program, pricing strategy and profits. Customer Boredom is conceptualized as a utility loss resulting from the purchase of a previously consumed brand. We analyze a...
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| Format: | Article |
| Language: | English |
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KeAi Communications Co., Ltd.
2025-11-01
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| Series: | Journal of Economy and Technology |
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| Online Access: | http://www.sciencedirect.com/science/article/pii/S2949948825000095 |
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| author | Axel Stock Minoo Talebi Ashoori |
| author_facet | Axel Stock Minoo Talebi Ashoori |
| author_sort | Axel Stock |
| collection | DOAJ |
| description | In this paper, we study utilizing a game theoretic model, how variety seeking triggered by customer boredom may affect a firm’s rewards program, pricing strategy and profits. Customer Boredom is conceptualized as a utility loss resulting from the purchase of a previously consumed brand. We analyze a two period model where two firms compete for a market of forward looking consumers by selling horizontally differentiated brands. When making the purchase decision in the second period, consumers trade off the utility loss from boredom with the benefits from obtaining the reward offered. In our analysis, we interestingly find that depending on consumers’ discount factor, firm profits either strictly increase or follow a u-shaped relationship with customer boredom. We also consider the case when brands differ in quality and show that under some conditions the high-quality firm’s profits decline while the low quality firm benefits when variety seeking due to boredom increases. |
| format | Article |
| id | doaj-art-6fe2e11e27c546d5bc7dc44eaa30a9c2 |
| institution | DOAJ |
| issn | 2949-9488 |
| language | English |
| publishDate | 2025-11-01 |
| publisher | KeAi Communications Co., Ltd. |
| record_format | Article |
| series | Journal of Economy and Technology |
| spelling | doaj-art-6fe2e11e27c546d5bc7dc44eaa30a9c22025-08-20T02:39:31ZengKeAi Communications Co., Ltd.Journal of Economy and Technology2949-94882025-11-01329931310.1016/j.ject.2025.04.001The impact of customer boredom on the efficacy of a rewards programAxel Stock0Minoo Talebi Ashoori1Marketing Department, College of Business Administration, University of Central Florida, Orlando, FL 32816, United States; Corresponding author.Marketing Department, College of Business Administration, California State University San Marcos, San Marcos, CA 92096, United StatesIn this paper, we study utilizing a game theoretic model, how variety seeking triggered by customer boredom may affect a firm’s rewards program, pricing strategy and profits. Customer Boredom is conceptualized as a utility loss resulting from the purchase of a previously consumed brand. We analyze a two period model where two firms compete for a market of forward looking consumers by selling horizontally differentiated brands. When making the purchase decision in the second period, consumers trade off the utility loss from boredom with the benefits from obtaining the reward offered. In our analysis, we interestingly find that depending on consumers’ discount factor, firm profits either strictly increase or follow a u-shaped relationship with customer boredom. We also consider the case when brands differ in quality and show that under some conditions the high-quality firm’s profits decline while the low quality firm benefits when variety seeking due to boredom increases.http://www.sciencedirect.com/science/article/pii/S2949948825000095Game TheoryCompetitive AnalysisRewards ProgramsCustomer Boredom |
| spellingShingle | Axel Stock Minoo Talebi Ashoori The impact of customer boredom on the efficacy of a rewards program Journal of Economy and Technology Game Theory Competitive Analysis Rewards Programs Customer Boredom |
| title | The impact of customer boredom on the efficacy of a rewards program |
| title_full | The impact of customer boredom on the efficacy of a rewards program |
| title_fullStr | The impact of customer boredom on the efficacy of a rewards program |
| title_full_unstemmed | The impact of customer boredom on the efficacy of a rewards program |
| title_short | The impact of customer boredom on the efficacy of a rewards program |
| title_sort | impact of customer boredom on the efficacy of a rewards program |
| topic | Game Theory Competitive Analysis Rewards Programs Customer Boredom |
| url | http://www.sciencedirect.com/science/article/pii/S2949948825000095 |
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