Airline Schedule Competition: Product-Quality Choice in a Duopoly Model
AbstractThis paper presents a simple model of airline schedule competition that circumvents the complexities of the spatial approach used in earlier papers. Consumers choose between two duopoly carriers, each of which has evenly spaced flights, by comparing the combinations of fare and expected schedule delay that they offer. In contrast to the spatial approach, the particular departure times of individual flights are thus not relevant. The model generates a number of useful comparative-static predictions, while welfare analysis shows that equilibrium flight frequencies tend to be inefficiently low.
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Bibliographic InfoPaper provided by University of California-Irvine, Department of Economics in its series Working Papers with number 050629.
Length: 27 pages
Date of creation: Apr 2006
Date of revision:
Other versions of this item:
- Jan K. Brueckner & Ricardo Flores-Fillol, 2006. "Airline Schedule Competition: Product-Quality Choice in a Duopoly Model," CESifo Working Paper Series 1731, CESifo Group Munich.
- NEP-ALL-2006-09-03 (All new papers)
- NEP-COM-2006-09-03 (Industrial Competition)
- NEP-IND-2006-09-03 (Industrial Organization)
- NEP-MKT-2006-09-03 (Marketing)
- NEP-URE-2006-09-03 (Urban & Real Estate Economics)
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