The Discount Attribution Test and the Competitive Effects of Loyalty Discounts

This article shows that the discount attribution test framework also provides a simple, intuitive way to illustrate the procompetitive consequences of loyalty discounts. In particular, the discount attribution test framework can be used to illustrate the effect, on both rivals and on buyers, of allowing sellers to offer loyalty discounts. In so doing, this framework sheds light on the misconceptions about loyalty discounts.