Are Airlines' Price-Setting Strategies Different?
AbstractUsing a sample of fare quotes for non-stop travel from New York to London, this paper investigates the dynamics of offered fares as the departure date nears. We find that the general trend is toward fare increase at an accelerated rate as the departure date approaches. Clear differences in price-setting strategies among the carriers competing on a particular route are documented.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 645.
Length: 12 p.
Date of creation: 2006
Date of revision:
airline industry; price dynamics;
Other versions of this item:
- L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-01-02 (All new papers)
- NEP-CSE-2007-01-02 (Economics of Strategic Management)
- NEP-IND-2007-01-02 (Industrial Organization)
- NEP-MIC-2007-01-02 (Microeconomics)
- NEP-URE-2007-01-02 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Glenn Ellison & Sara Fisher Ellison, 2005. "Lessons About Markets from the Internet," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 19(2), pages 139-158, Spring.
- Severin Borenstein & Nancy L. Rose, 1991.
"Competition and Price Dispersion in the U.S. Airline Industry,"
NBER Working Papers
3785, National Bureau of Economic Research, Inc.
- Borenstein, Severin & Rose, Nancy L, 1994. "Competition and Price Dispersion in the U.S. Airline Industry," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 102(4), pages 653-83, August.
- Darin Lee & María José Luengo-Prado, 2005. "The Impact of Passenger Mix on Reported “Hub Premiums” in the U.S. Airline Industry," Southern Economic Journal, Southern Economic Association, vol. 72(2), pages 372â394, October.
- Severin Borenstein, 1989. "Hubs and High Fares: Dominance and Market Power in the U.S. Airline Industry," RAND Journal of Economics, The RAND Corporation, vol. 20(3), pages 344-365, Autumn.
- Steven Berry & Michael Carnall & Pablo T. Spiller, 1996. "Airline Hubs: Costs, Markups and the Implications of Customer Heterogeneity," NBER Working Papers 5561, National Bureau of Economic Research, Inc.
- Volodymyr Bilotkach, 2007. "Asymmetric Regulation and Airport Dominance in International Aviation: Evidence from the London-new York Market," Southern Economic Journal, Southern Economic Association, vol. 74(2), pages 505-523, October.
- Shibata, Kyohei, 2001. "Motives for mega-alliance between US ex-trunk carriers and European flag carriers," Journal of Air Transport Management, Elsevier, Elsevier, vol. 7(4), pages 197-206.
- Evans, William N & Kessides, Ioannis N, 1993. "Localized Market Power in the U.S. Airline Industry," The Review of Economics and Statistics, MIT Press, vol. 75(1), pages 66-75, February.
- Puller, Steven L. & Taylor, Lisa M., 2012. "Price discrimination by day-of-week of purchase: Evidence from the U.S. airline industry," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 84(3), pages 801-812.
- Marco Alderighi & Marcella Nicolini & Claudio A. Piga, 2012.
"Combined Effects of Load Factors and Booking Time on Fares: Insights from the Yield Management of a Low-Cost Airline,"
Quaderni di Dipartimento, University of Pavia, Department of Economics and Quantitative Methods
171, University of Pavia, Department of Economics and Quantitative Methods.
- Marco Alderighi & Marcella Nicolini & Claudio A. Piga, 2012. "Combined Effects of Load Factors and Booking Time on Fares: Insights from the Yield Management of a Low-Cost Airline," Working Papers, Fondazione Eni Enrico Mattei 2012.14, Fondazione Eni Enrico Mattei.
- Escobari, Diego, 2014.
"Estimating dynamic demand for airlines,"
Economics Letters, Elsevier,
Elsevier, vol. 124(1), pages 26-29.
- Escobari, Diego & Lee, Jim, 2013.
"Demand Uncertainty and Capacity Utilization in Airlines,"
46059, University Library of Munich, Germany.
- Diego Escobari & Jim Lee, 2014. "Demand uncertainty and capacity utilization in airlines," Empirical Economics, Springer, Springer, vol. 47(1), pages 1-19, August.
- Raymond Deneckere & James Peck, 2012. "Dynamic Competition With Random Demand and Costless Search: A Theory of Price Posting," Econometrica, Econometric Society, Econometric Society, vol. 80(3), pages 1185-1247, 05.
- Mantin, Benny & Koo, Bonwoo, 2009. "Dynamic price dispersion in airline markets," Transportation Research Part E: Logistics and Transportation Review, Elsevier, Elsevier, vol. 45(6), pages 1020-1029, November.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bibliothek).
If references are entirely missing, you can add them using this form.