Free upgrades with costly consequences: can preferential treatment inflate customers’ enttlement and induce negative behaviors?

Preferential treatment, whereby some customers are afforded benefits that are not offered to other customers, is commonly used by companies to reward their customers. Popular methods include random prizes, exclusive discounts, and free upgrades. Given the ubiquity of preferential treatment in current managerial practice, the present research addresses the following questions: (1) Might preferential treatment have some unintended negative consequences for companies, such as increasing opportunistic behaviors by consumers? (2) Do new and existing customers react differently to preferential treatment? And if so, (3) does preferential treatment elicit more negative consequences (i.e., opportunistic behaviors) by new customers or by existing customers?