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Collude, Compete, or Both? Deregulation in the Norwegian Airline Industry

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  • Kjell G. Salvanes
  • Frode Steen
  • Lars Sørgard

Abstract

The purpose of this paper is to test the nature of competition concerning price and capacity setting in the Norwegian airline industry after its deregulation in 1994. Did the two airlines, SAS and Braathens, compete on prices and capacities (competition), collude on prices and capacities (collusion), or collude on prices and compete on capacities (semicollusion)? We reject the hypothesis that they achieved collusion, and we find the observed behaviour consistent with semicollusive behaviour and inconsistent with competitive behaviour. © The London School of Economics and the University of Bath 2003

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Bibliographic Info

Article provided by London School of Economics and University of Bath in its journal Journal of Transport Economics and Policy.

Volume (Year): 37 (2003)
Issue (Month): 3 (September)
Pages: 383-416

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Handle: RePEc:tpe:jtecpo:v:37:y:2003:i:3:p:383-416

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Web page: http://www.bath.ac.uk/e-journals/jtep

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Cited by:
  1. Andreas Nicklisch, 2012. "Does collusive advertising facilitate collusive pricing? Evidence from experimental duopolies," European Journal of Law and Economics, Springer, vol. 34(3), pages 515-532, December.
  2. Jan K. Brueckner & Pierre M. Picard, 2012. "Airline Alliances, Carve-Outs and Collusion," CREA Discussion Paper Series 12-09, Center for Research in Economic Analysis, University of Luxembourg.
  3. Nakagawa, Dai & Aoyama, Yoshitaka & Ito, Tadashi & Nishizawa, Hiroyuki, 2005. "Assessment of passenger benefits brought about by international airport projects," Transport Policy, Elsevier, vol. 12(6), pages 512-524, November.
  4. Stenborg, Markku, 2002. "Economics of Joint Dominance," Discussion Papers 834, The Research Institute of the Finnish Economy.
  5. Clark, Derek J. & Jørgensen, Finn & Mathisen, Terje Andreas, 2011. "Relationships between fares, trip length and market competition," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(7), pages 611-624, August.
  6. Markku Stenborg, 2004. "Forest for the Trees: Economics of Joint Dominance," European Journal of Law and Economics, Springer, vol. 18(3), pages 365-385, December.

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