Loyalty Programs: Of Rats and Men

It seems like everyone has a loyalty program these days. Buy a cup of coffee, and you get a punch card that promises a free cup after you purchase some number of additional cups. Shop at the grocery store, and you get points to reduce the price of gas. Our wallets bulge with partially punched [...]

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Painful Sushi and Other Pricing Blunders

What’s the worst way to sell something? According to Carnegie Mellon University economics and psychology professor George Loewenstein (see The Pain of Buying and Brain Scans Predict Buying Behavior), selling products in a way that the consumer sees the price increase with every bit of consumption causes the most “pain”. This isn’t physical pain, of [...]

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