Actually, the ultimate power of a loyalty program is that it persuades some customers to spend a tangible currency with understood value (dollars) in pursuit of a stash of an intangible currency with shifting / unknown value (miles). You know what a dollar will buy, but not what a mile will be worth tomorrow or next year.

This trade used to be at least quasi-rational, when the value of miles was at least somewhat predictable. No longer -- not with regular devaluations and some airlines, like Delta, no longer even publishing redemption charts. You wouldn't walk up to a Travelex counter and buy Euro or yen without first learning the exchange rate. Why change flight-buying behavior to earn miles without any real idea of their value? [/QUOTE]

The programs' raison d'etre is to discourage rational behavior, e.g. buying the cheapest direct flight at the best time, whether operated by Airline X, Y, or Z. The Airline X program exists to get you to choose Airline X even when it costs more (in dollars, time, or convenience). The programs reward irrational decisions with status benefits that mostly cost the airline nothing (early boarding, etc.) and miles of unknown value.

That is learned behavior. It's what happens when the public wises up. AAdvantage has about 100 million members, but most don't fly enough to count as frequent flyers -- or realize that the price of chasing "loyalty rewards" usually exceeds the value of said rewards.

Anecdotes are of even lower value than miles ( ) but I'm a fair example; I chased airline status for 25+ years, but given the diluted state of the programs today plus my thankfully reduced business flying, I now buy the lowest-cost, most convenient flights and spread spend across four or five airlines. Unless you are pumping a high level of corporate spending into biz travel, the airlines no longer make a rational case for concentrating your flying dollars with a single carrier or alliance.