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Quality Disclosure Programs and Internal Organizational Practices: Evidence from Airline Flight Delays

Author

Listed:
  • Silke J. Forbes
  • Mara Lederman
  • Trevor Tombe

Abstract

Disclosure programs exist in many industries in which consumers are poorly informed about product quality. We study a disclosure program for airline on-time performance, which ranks airlines based on the fraction of their flights that arrive less than 15 minutes late. The program creates incentives for airlines to focus their efforts on flights close to this threshold. We find that firms in this industry are heterogeneous in how they respond to these incentives. Moreover, this heterogeneity correlates with internal firm characteristics. Our findings highlight the importance of interactions between incentives created by a disclosure program and firms' internal organizational practices. (JEL D22, L15, L25, L93)

Suggested Citation

  • Silke J. Forbes & Mara Lederman & Trevor Tombe, 2015. "Quality Disclosure Programs and Internal Organizational Practices: Evidence from Airline Flight Delays," American Economic Journal: Microeconomics, American Economic Association, vol. 7(2), pages 1-26, May.
    • Handle: RePEc:aea:aejmic:v:7:y:2015:i:2:p:1-26
    Note: DOI: 10.1257/mic.20130164
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    Citations

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    Cited by:

    1. Alan Benson, 2015. "Do Agents Game Their Agents' Behavior? Evidence from Sales Managers," Journal of Labor Economics, University of Chicago Press, vol. 33(4), pages 863-890.
    2. Silke J. Forbes & Mara Lederman & Zhe Yuan, 2019. "Do Airlines Pad Their Schedules?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 54(1), pages 61-82, February.
    3. Yimga, Jules, 2018. "Domestic code-sharing agreements and on-time performance: Evidence from the US airline industry," Transport Policy, Elsevier, vol. 71(C), pages 14-27.
    4. Forbes, Silke J. & Lederman, Mara & Wither, Michael J., 2019. "Quality disclosure when firms set their own quality targets," International Journal of Industrial Organization, Elsevier, vol. 62(C), pages 228-250.
    5. Makofske, Matthew Philip, 2020. "Mandatory disclosure, letter-grade systems, and corruption: The case of Los Angeles County restaurant inspections," Journal of Economic Behavior & Organization, Elsevier, vol. 172(C), pages 292-313.
    6. Yimga, Jules & Gorjidooz, Javad, 2019. "Airline schedule padding and consumer choice behavior," Journal of Air Transport Management, Elsevier, vol. 78(C), pages 71-79.

    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation

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