Airline Schedule Competition: Product-Quality Choice in a Duopoly Model
This paper presents a simple model of airline schedule competition that circumvents the complexities of the spatial approach used in earlier papers. Consumers choose between two duopoly carriers, each of which has evenly spaced flights, by comparing the combinations of fare and expected schedule delay that they offer. In contrast to the spatial approach, the particular departure times of individual flights are thus not relevant. The model generates a number of useful comparative-static predictions, while welfare analysis shows that equilibrium flight frequencies tend to be inefficiently low.
|Date of creation:||2006|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +49 (89) 9224-0
Fax: +49 (89) 985369
Web page: http://www.cesifo.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Shaked, Avner & Sutton, John, 1982. "Relaxing Price Competition through Product Differentiation," Review of Economic Studies, Wiley Blackwell, vol. 49(1), pages 3-13, January.
- Encacoua, D. & Moreaux, M. & Perrot, A., 1995.
"Compatibility and Competition in Airlines: Demand Side Network Effect,"
Papiers d'Economie MathÃ©matique et Applications
95.21, UniversitÃ© PanthÃ©on-Sorbonne (Paris 1).
- Encaoua, David & Moreaux, Michel & Perrot, Anne, 1996. "Compatibility and competition in airlines demand side network effects," International Journal of Industrial Organization, Elsevier, vol. 14(6), pages 701-726, October.
- Wauthy, Xavier, 1996.
"Quality Choice in Models of Vertical Differentiation,"
Journal of Industrial Economics,
Wiley Blackwell, vol. 44(3), pages 345-53, September.
- Wauthy, X., 1994. "Quality Choice in Models of Vertical Differentiation," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1994033, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
- Panzar, John C, 1979. "Equilibrium and Welfare in Unregulated Airline Markets," American Economic Review, American Economic Association, vol. 69(2), pages 92-95, May.
- Jan K. Brueckner & Raquel Girvin, 2006.
"Airport Noise Regulation, Airline Service Quality, and Social Welfare,"
060706, University of California-Irvine, Department of Economics.
- Brueckner, Jan K. & Girvin, Raquel, 2008. "Airport noise regulation, airline service quality, and social welfare," Transportation Research Part B: Methodological, Elsevier, vol. 42(1), pages 19-37, January.
- Jan K. Brueckner & Raquel Girvin, 2006. "Airport Noise Regulation, Airline Service Quality, and Social Welfare," CESifo Working Paper Series 1820, CESifo Group Munich.
- Brueckner, Jan K & Whalen, W Tom, 2000. "The Price Effects of International Airline Alliances," Journal of Law and Economics, University of Chicago Press, vol. 43(2), pages 503-45, October.
- Schipper, Youdi & Nijkamp, Peter & Rietveld, Piet, 2007. "Deregulation and welfare in airline markets: An analysis of frequency equilibria," European Journal of Operational Research, Elsevier, vol. 178(1), pages 194-206, April.
- Jan K. Brueckner, 2004.
"Network Structure and Airline Scheduling,"
Journal of Industrial Economics,
Wiley Blackwell, vol. 52(2), pages 291-312, 06.
- Choi, Chong Ju & Shin, Hyun Song, 1992. "A Comment on a Model of Vertical Product Differentiation," Journal of Industrial Economics, Wiley Blackwell, vol. 40(2), pages 229-31, June.
- GABSZEWICZ, Jean J. & THISSE, Jacques-François, .
"Price competition, quality and income disparities,"
CORE Discussion Papers RP
-370, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- d'Aspremont, C & Gabszewicz, Jean Jaskold & Thisse, J-F, 1979.
"On Hotelling's "Stability in Competition","
Econometric Society, vol. 47(5), pages 1145-50, September.
- Schipper, Youdi & Rietveld, Piet & Nijkamp, Peter, 2003. "Airline deregulation and external costs: a welfare analysis," Transportation Research Part B: Methodological, Elsevier, vol. 37(8), pages 699-718, September.
When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_1731. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julio Saavedra)
If references are entirely missing, you can add them using this form.