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Loyalty programs may limit competition, and they could be pushing prices up for everyone

  • Written by: Alexandru Nichifor, Associate Professor, Faculty of Business and Economics, University of Melbourne, The University of Melbourne
Loyalty programs may limit competition, and they could be pushing prices up for everyoneMMXeon/Shutterstock

Loyalty programs enable firms to offer significantly lower prices to some of their customers. You’d think this would encourage strong competition.

But that isn’t always what actually happens. New research shows that paradoxically, by changing the way companies target customers, loyalty programs can sometimes reduce...

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