Alliances in the Air: Some Worldwide Evidence
AbstractWe consider an empirical model of worldwide airlines’ alliances that we apply to a large set of companies for the period 1995-2000, with special attention to US and EU carriers. From the estimation of a cost, capacity and demand system that accounts for cross-price elasticities, we attempt to shed light on several interesting issues: First, we analyse whether alliance members’ networks are complements or substitutes. Second, we construct price-cost margins and test several hypothesis of non-cooperative behaviour such as individual Nash and joint price setting within the alliance. We suggest that current alliances' pricing habits are not uniform and range from individual Nash to more competitive behaviours.
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airlines; alliances; gross-price elasticities; Nash behaviour;
Other versions of this item:
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
- L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
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- Gagnepain, Philippe & Marin, Pedro L, 2006.
"Regulation and Incentives in European Aviation,"
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- Gagnepain, Philippe & Marín, Pedro L., . "Regulation and Incentives in European Aviation," Open Access publications from Universidad Carlos III de Madrid info:hdl:10016/5032, Universidad Carlos III de Madrid.
- Gagnepain, Philippe & Marín Uribe, Pedro Luis, 2004. "Regulation and Incentives in European Aviation," CEPR Discussion Papers 4318, C.E.P.R. Discussion Papers.
- Philippe Gagnepain & Pedro Marin, 2006. "Regulation and Incentives in European Aviation," Post-Print hal-00622844, HAL.
- Gagnepain, Philippe & Marín, Pedro L. [marin], . "Regulation and Incentives in European Aviation," Open Access publications from Universidad Carlos III de Madrid info:hdl:10016/5041, Universidad Carlos III de Madrid.
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CIG Working Papers
FS IV 97-31, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
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- Jaumandreu, Jordi & Lorences, Joaquin, 2002. "Modelling price competition across many markets (An application to the Spanish loans market)," European Economic Review, Elsevier, vol. 46(1), pages 93-115, January.
- Oum, Tae Hoon & Park, Jong-Hun, 1997. "Airline alliances: current status, policy issues, and future directions," Journal of Air Transport Management, Elsevier, vol. 3(3), pages 133-144.
- Neven, Damien J. & Roller, Lars-Hendrik, 1996. "Rent sharing in the European airline industry," European Economic Review, Elsevier, vol. 40(3-5), pages 933-940, April.
- Brueckner, Jan K., 2001. "The economics of international codesharing: an analysis of airline alliances," International Journal of Industrial Organization, Elsevier, vol. 19(10), pages 1475-1498, December.
- Marin, Pedro L, 1995. "Competition in European Aviation: Pricing Policy and Market Structure," Journal of Industrial Economics, Wiley Blackwell, vol. 43(2), pages 141-59, June.
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