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Predatory reputation in US airline markets

  • Kim, Sung-Hwan

Despite its long history in antitrust policy, predation remains a poorly understood phenomenon. The main difficulty is in empirically identifying predatory intent. I propose a method for measuring the effect of reputation, whose significance would enable us to infer predatory intents. Maximum likelihood estimation using simulated annealing algorithm is conducted with a sample of US airline markets. The results provide some support for the presence of entrants learning and reputation effect. As an application, I discuss how the outcomes of my empirical model could help analyze such antitrust cases as the American Airlines Case.

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Article provided by Elsevier in its journal International Journal of Industrial Organization.

Volume (Year): 27 (2009)
Issue (Month): 5 (September)
Pages: 592-604

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Handle: RePEc:eee:indorg:v:27:y:2009:i:5:p:592-604
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505551

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