Orchestrating Rewards in the Era of Intelligence-Driven Commerce
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arXiv
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| Main Authors: | , , |
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| Format: | Preprint |
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2025
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| _version_ | 1866911344484155392 |
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| author | Oamen, Paul Osemudiame Wesley, Robert Onobhayedo, Pius |
| author_facet | Oamen, Paul Osemudiame Wesley, Robert Onobhayedo, Pius |
| contents | Despite their evolution from early copper-token schemes to sophisticated digital solutions, loyalty programs remain predominantly closed ecosystems, with brands retaining full control over all components. Coalition loyalty programs emerged to enable cross-brand interoperability, but approximately 60\% fail within 10 years in spite of theoretical advantages rooted in network economics. This paper demonstrates that coalition failures stem from fundamental architectural limitations in centralized operator models rather than operational deficiencies, and argues further that neither closed nor coalition systems can scale in intelligence-driven paradigms where AI agents mediate commerce and demand trustless, protocol-based coordination that existing architectures cannot provide. We propose a hybrid framework where brands maintain sovereign control over their programs while enabling cross-brand interoperability through trustless exchange mechanisms. Our framework preserves closed system advantages while enabling open system benefits without the structural problems that doom traditional coalitions. We derive a mathematical pricing model accounting for empirically-validated market factors while enabling fair value exchange across interoperable reward systems. |
| format | Preprint |
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arxiv_https___arxiv_org_abs_2512_00738 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Orchestrating Rewards in the Era of Intelligence-Driven Commerce Oamen, Paul Osemudiame Wesley, Robert Onobhayedo, Pius General Economics Economics Artificial Intelligence Computers and Society Despite their evolution from early copper-token schemes to sophisticated digital solutions, loyalty programs remain predominantly closed ecosystems, with brands retaining full control over all components. Coalition loyalty programs emerged to enable cross-brand interoperability, but approximately 60\% fail within 10 years in spite of theoretical advantages rooted in network economics. This paper demonstrates that coalition failures stem from fundamental architectural limitations in centralized operator models rather than operational deficiencies, and argues further that neither closed nor coalition systems can scale in intelligence-driven paradigms where AI agents mediate commerce and demand trustless, protocol-based coordination that existing architectures cannot provide. We propose a hybrid framework where brands maintain sovereign control over their programs while enabling cross-brand interoperability through trustless exchange mechanisms. Our framework preserves closed system advantages while enabling open system benefits without the structural problems that doom traditional coalitions. We derive a mathematical pricing model accounting for empirically-validated market factors while enabling fair value exchange across interoperable reward systems. |
| title | Orchestrating Rewards in the Era of Intelligence-Driven Commerce |
| topic | General Economics Economics Artificial Intelligence Computers and Society |
| url | https://arxiv.org/abs/2512.00738 |