So Yeon Chun is an Associate Professor of Technology & Operations Management at INSEAD. So Yeon’s data-driven research focuses on the interface between operations and marketing in consumer loyalty reward programs (consumer choices, point currencies and monetization, customer lifetime values, and consumer behavior experiments), revenue management (pricing and forecasting), and risk management (risk measures, portfolio optimization) with applications in industries such as retail, transportation, finance, and hospitality. So Yeon holds a PhD in Operations Research and an MS in Applied Statistics from the School of Industrial and Systems Engineering at the Georgia Institute of Technology.
| Name of Speaker | Chun So Yeon |
| Schedule | Friday 12 May 2023, 10.00am – 11.30am |
| Venue | BIZ1-0202 |
| Link to Register | https://nus-sg.zoom.us/meeting/register/tZ0vdO-sqDwvHtaug9Pj_1n9e035FOi3xDX- |
| Title | Point vs. Money: Monetization of Loyalty Currency and Consumer Payment Choice Behavior |
| Abstract | In recent years, companies have made various changes to the design and operational management of their loyalty programs to further monetize their virtual currency, or points, by making them more like money. However, it remains unclear whether consumers treat points as they treat money when deciding whether to use them to pay for a purchase. In this talk, we aim to address this question and explore how and why consumers spend loyalty points differently than money. In the first part of the talk, we investigate the important factors that influence consumers’ decisions to pay with either points or money, and we examine how a co-branded credit card partnership affects consumers’ attitudes toward point currency. We develop a model of consumers’ payment decisions and estimate it using proprietary transaction data from a major US airline company through a hierarchical Bayesian framework. In the second part of the talk, we present a series of behavioral experiments that focus on the design and operation of the exchange rate between points and money. We examine the behavioral bias that consumers exhibit toward point currency and explore whether the effects of the exchange rate design are unique to loyalty currencies or more generally apply to other foreign currencies. |
