Abstract
The purpose of this research is to contribute to a better theoretical knowledge about the sources of efficiency in loyalty programs, in the retail sector. It is based on the BehaviorScan single-source panel which has been crossed with the store data base of a French retailer. We implemented the multinomial Dirichlet model, in order to test the impact of loyalty programs on the general market structure. The double jeopardy phenomenon is present and loyalty programs do not substantially change market structures. When all companies have loyalty programs, the market is characterized by an absence of change of the competitive situation.
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