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.

Making Open Access Viable Economically

The Editors-in-Chief have decided that we will provide our much-cherished readers with an editorial every so often as a way of sharing insights from the “machine room” where so much of the thinking and work is done to publish the German Law Journal. We want to let you in on the ideas that are on our minds, share with you our observations, and include you in the conversations we are having that might be of interest to you. We begin this tradition with this issue, Volume 21 – Number 6. Andrew Hyde, a member of the editorial team with which the Journal has partnered at Cambridge University Press, as well as Russell A. Miller and Emanuel V. Towfigh, two of the Journal’s co-Editors-in-Chief, open our From the Headquarters Essay with a piece on the Journal’s experiences with and its further plans for making open-access (OA) publishing economically viable. Related to that theme, we also want to share news with you about the introduction of a voluntary article processing charge this fall. Finally, we want to draw your attention to a videos and podcasts service we will start to produce to accompany the scholarship published in the Journal as a way of promoting our authors’ work and expanding access to their ideas. If you are interested only in these latter initiatives, you can also read the short section in the GLJ Instructions for Authors

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