Acquisition and retention · Analytical model of referral incentives
Optimal Referral Bonuses with Asymmetric Information: Firm-Offered and Interpersonal Incentives
Kornish, L. J., & Li, Q. (2010). Marketing Science, 29(1), 108–121.
Plain-English take
When consumers place greater weight on recipients' outcomes, the optimal bonus tends to be higher unless price is a more efficient way to motivate recommendations. For your marketing: Helps frame referral incentives as a joint decision about product price, bonus design, and the recipient's benefit.
How much weight to give this
2.5/5 Limited or context-dependent evidence
The 1–5 evidence-check score is a practical reading aid, not a formal peer review or a probability that a conclusion is true. It combines design strength (2 points), sample reporting (1), comparison/control clarity (1), and how much of the paper could be checked (1). Access affects how confidently this directory can assess a study, not the study's underlying quality. Blinding is reported separately because it is not relevant to every design.
This is theory or a framework, not a direct empirical test of the marketing outcome.
A usable sample size is not stated in the profile's accessible source.
No participant control group; conclusions are conditional on the model or synthesis assumptions.
This profile could be checked against an abstract or metadata, not the full paper.
Double-blind? Not applicable in the same way as a participant-treatment experiment.
Research question
What the authors investigated
How should firms set referral bonuses when customers differ in information and care about the people they refer?
Design
Analytical model of firm-offered and interpersonal incentives under asymmetric information.
Sample and setting
Theory paper; no empirical sample.
Reported result
What the study found
When consumers place greater weight on recipients' outcomes, the optimal bonus tends to be higher unless price is a more efficient way to motivate recommendations. In some cases, the optimal bonus is zero and the product price is lower.
This is a paraphrase of the source. Check the original paper for definitions, estimates, statistical uncertainty and analysis details.
Scope and transfer
Limitations to keep in view
Results depend on the model's assumptions about consumer information, interpersonal concern, and incentive response; they are not estimates of an average referral-program lift.
Possible founder application
Helps frame referral incentives as a joint decision about product price, bonus design, and the recipient's benefit. Use the model to generate hypotheses, then test program economics locally.
Evidence access
Publisher abstract; full text may require access
INFORMS publisher abstract retrieved with Firecrawl; summary is explicitly theoretical.
If only an abstract or metadata was available, the profile is limited to claims supported there. A paper's paywall does not change its evidentiary status, but it limits what we can substantiate from accessible text.