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Are airlines' price-setting strategies different?

  • Bilotkach, Volodymyr
  • Gorodnichenko, Yuriy
  • Talavera, Oleksandr

Using a sample of fare quotes for non-stop travel from New York to London, this paper documents a set of stylized facts about pricing strategies of air carriers on this route. Two key facts stand out. First, airlines appear to employ strikingly different pricing strategies. Second, fares increase at an accelerated rate as the departure date approaches.

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Article provided by Elsevier in its journal Journal of Air Transport Management.

Volume (Year): 16 (2010)
Issue (Month): 1 ()
Pages: 1-6

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Handle: RePEc:eee:jaitra:v:16:y:2010:i:1:p:1-6
Contact details of provider: Web page: http://www.journals.elsevier.com/journal-of-air-transport-management/

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  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. Shibata, Kyohei, 2001. "Motives for mega-alliance between US ex-trunk carriers and European flag carriers," Journal of Air Transport Management, Elsevier, vol. 7(4), pages 197-206.
  6. 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.
  7. Glenn Ellison & Sara Fisher Ellison, 2005. "Lessons About Markets from the Internet," Journal of Economic Perspectives, American Economic Association, vol. 19(2), pages 139-158, Spring.
  8. 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 372–394, October.
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