Rewarding Money or Time? The Sunk Cost Effects of Customized Rewards in Loyalty Programs
Bibliographic record
Abstract
This research investigates an overlooked aspect of firm loyalty programs: rewards for consumer temporal efforts (RTEs), which pertain to consumer time spent on firm activities, as opposed to rewards for consumer monetary efforts (RMEs), which pertain to consumer money spent on firm products. Across six main studies, the authors find robust evidence that consumers devalue time compared with money—they underestimate the sunk costs of time and consider RTE easily earned. Therefore, when select consumers receive customized RTE (vs. RME) without prior notice, they will perceive lower effort-related costs associated with the reward, making them less likely to redeem it. If they choose to redeem it, they tend to purchase more novelty products because they will categorize RTE under the mental account of windfall gains. They are also more inclined to repurchase after redemption due to an elevated sense of gratitude. However, when consumers are reminded of the opportunity costs of their prior temporal efforts, they become just as likely to redeem the reward as those rewarded with RME, owing to the heightened sunk time effect. These findings present a novel customer-engaging strategy for firm loyalty programs, namely rewarding consumer time (RTE) in an unconventional manner.
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How this classification was reachedexpand
Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.052 | 0.014 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.001 | 0.000 |
| Bibliometrics | 0.001 | 0.003 |
| Science and technology studies | 0.000 | 0.000 |
| Scholarly communication | 0.000 | 0.000 |
| Open science | 0.001 | 0.000 |
| Research integrity | 0.000 | 0.001 |
| Insufficient payload (model declined to judge) | 0.000 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; both teacher heads agree on what is shown here.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".