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Airline Merger Effects Along the Exposure Distribution

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  • Benjamin T. Leyden

Abstract

I evaluate the competitive effects of four major U.S. airline mergers (2008-2013) using a continuous difference-in-differences model. Standard merger retrospectives typically rely on binary treatment classifications that collapse important variation in competitive exposure. I construct three continuous route-level exposure measures — simulated ∆HHI (direct competitive overlap), merger share (the merging carriers' combined presence), and non-overlap merger share (merger share on routes where only one merging carrier operated) — and estimate dose-response curves for each. Results reveal substantial heterogeneity both across mergers and within each merger across the exposure distribution, with the three measures yielding different conclusions, as each captures a distinct competitive channel.

Suggested Citation

  • Benjamin T. Leyden, 2026. "Airline Merger Effects Along the Exposure Distribution," CESifo Working Paper Series 12669, CESifo.
    • Handle: RePEc:ces:ceswps:_12669
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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