Sticky Rebates: Rollback Rebates Induce Non-Rational Loyalty in Consumers

Competition policy often relies on the assumption of a rational consumer, although other models may better account for people’s decision behavior. In three experiments, we investigate the influence of loyalty rebates on consumers based on the alternative Cumulative Prospect Theory (CPT), both theoretically and experimentally. CPT predicts that loyalty rebates could harm consumers by impeding rational switching from an incumbent to an outside option (e.g., a market entrant). In a repeated trading task, participants decided whether or not to enter a loyalty rebate scheme and to continue buying within that scheme. Meeting the condition triggering the rebate was uncertain. Loyalty rebates considerably reduced the likelihood that participants switched to a higher-payoff outside option later. We conclude that loyalty rebates may inflict substantial harm on consumers and may have an underestimated potential to foreclose consumer markets.

Review of levetiracetam, with a focus on the extended release formulation, as adjuvant therapy in controlling partial-onset seizures

Levetiracetam is a second-generation antiepileptic drug (AED) with a unique chemical structure and mechanism of action. The extended release formulation of levetiracetam (Keppra XR™; UCB Pharma) was recently approved by the Food and Drug Administration for adjunctive therapy in the treatment of partial-onset seizures in patients 16 years of age and older with epilepsy. This approval is based on a double-blind, randomized, placebo-controlled, multicenter, multinational trial. Levetiracetam XR allows for once-daily dosing, which may increase compliance and, given the relatively constant plasma concentrations, may minimize concentration-related adverse effects. Levetiracetam’s mode of action is not fully elucidated, but it has been found to target high-voltage, N-type calcium channels as well as the synaptic vesicle protein 2A (SV2A). Levetiracetam has nearly ideal pharmacokinetics. It is rapidly and almost completely absorbed after oral ingestion, is <10% protein-bound, demonstrates linear kinetics, is minimally metabolized through a pathway independent of the cytochrome P450 system, has no significant drug–drug interactions, and has a wide therapeutic index. The most common reported adverse events with levetiracetam XR were somnolence, irritability, dizziness, nausea, influenza, and nasopharyngitis. Levetiracetam XR provides an efficacious and well-tolerated treatment option for adjunctive therapy in the treatment of partial-onset seizures